The US's southern underbelly is scorched like meat on a grill. The drought has spawned wildfires, turning grasslands to ash. In Texas, the leading cotton producer in the US, 59 per cent of the cotton crop is in poor condition or worse. Harvests of hard winter wheat, prized for yeasted breads, have plummeted in Kansas, Oklahoma and Texas as yields and acreage contracted. Ranchers cannot feed their cattle on parched pastures.

Mr Hancock, a fourth-generation farmer, says the cotton seeds he planted on his 3,000 dryland acres never germinated. "All I see is dry, barren farmland. The weeds really haven't even grown," he says. His irrigated crop is also "right on the edge", as temperatures in Lubbock have hovered near 38C all month. Last month was the hottest June in Texas on record, breaking the previous peak in 1953. The pain is spreading to businesses that serve the farms. West of Mr Hancock, the Meadow Farmers Co-op Gin - the machine that strips cotton fibres from the seeds - will hire only one 16-person crew at autumn harvest time, rather than the two round-the-clock crews that handled last year's bumper crop.

The state has more than 13 million cattle, more than any other. But the size of the herd, dwindling for years, may shrink faster as ranchers are forced to sell calves and breeding cows they cannot feed. "There's no green," says George Enloe, a cattle broker in Amarillo, Texas. "It looks like the dead of winter, except when you roll the window down it's 100 degrees (38C)." Old-timers are comparing the situation to a legendary "big drought" of the 1950s. The parallel is not encouraging, as that one lasted years.

Ahead of a summit of euro zone leaders on July 21 to discuss a second bailout for Greece, Papandreou said his government had taken the necessary decisions, however difficult they were, to deal with the crisis, and it was Europe's turn to do the same. "We managed not to let Greece go bankrupt, and neither will it go bankrupt," Papandreou was quoted as saying by Greek newspaper Kathimerini, referring to whether credit rating agencies could find Greek debt to be in "selective default."

"For a year and a half now, I've been continuously reiterating to our partners that we must collectively take brave decisions, not just for the future of Greece but of Europe as a whole. It is time for Europe to wake up," he added. With sovereign debt jitters having reached Italy, the euro zone's third-largest economy, Europe's leaders are struggling to agree on how to provide new aid for Greece to prevent contagion from spreading further in financial markets.

Greece's total outstanding debt is around 370 billion euros ($523 billion). Most economists regard the debt burden, at around 160 percent of gross domestic product, to be unsustainable as it stifles growth, with the economy seen contracting by nearly 4 percent this year after a 4.5 percent slump last year.

The Church vehemently denies accusations it is one of Greece's biggest tax dodgers and says it is playing a vital social, economic and spiritual role in this time of hardship. With the third year of recession tormenting Greece's 11 million people, the Church has provided solace, comfort and nourishment but activists say it's now time to dig deep into its coffers to help with the bailout. The Greek Orthodox Church has long enjoyed a privileged, some would say cosy, status when it comes to taxes in a country where it is responsible for the sole official religion, with one critic calling its complex finances at best opaque.

But the sovereign debt crisis that has rocked the Greek state, thrown hundreds of thousands of people out of work, and forced painful cuts in salaries, pensions and benefits, has raised fresh questions about the Church's tax position. More than 100,000 people have joined a Greek Facebook page "Tax The Church," and 29,000 have so far signed an online petition urging the state to harness "the huge fortune of churches" to reduce Greece's crushing budget deficit.

The state at the moment pays the salaries of about 9,000 black-robed priests, including about 100 metropolitans who run the Church, as well as the pensions of retired clergy. It costs the public purse 268 million euros a year, Facebook campaigners say. Over the centuries before Turkish rule, Byzantine emperors gave vast swathes of the country to the men of God. In the Ottoman era, many Greek families entrusted their property to the Church for safe-keeping to avoid expropriation by the Turks. Records were poor and it was not always returned.

The government is now under intense pressure from the IMF and the EU to sell off public assets, including real estate. Part of the problem is no one knows how much property the Church has. Greece has no central land registry and the Church's decentralised structure means it does not know what it owns. "The Greek Church is paying almost nothing in taxes to the Greek state for the total assets that it controls," one senior tax expert, who declined to be named, told Reuters.

From the smallest village in northern Greece, where farmers pay rent to the Church, to the smart suburbs of Athens, where the Church owns prime real estate in the seafront millionaires' neighborhood of Vouliagmeni, the land holdings are enormous. Stefanos Manos, another former finance minister from the early 1990s, said the Church's real estate portfolio was worth billions of euros but it had always resisted an outside audit. "It is scandalous that we don't know, and indeed they don't know what they own," Manos said. "It all starts from this opaque situation. But no one wants to know. No one wants transparency."

Mr Habsburg's body was buried shortly afterwards in the Imperial crypt where his ancestors lie. However, his heart will be taken to Hungary for burial at an abbey west of Budapest on Sunday, in accordance with a Habsburg tradition. A passionate advocate of European unity, Mr Habsburg served as a member of the European parliament for two decades.

Mr Habsburg was born in 1912, six years before the collapse of the empire at the end of the First World War. He spent many decades exiled from Austria after his family fled in 1919, but relinquished his own claim to inherit the empire in 1961. Five years later he was allowed to return to Austria. He was an opponent of the Nazis and spoke out against Germany's annexation of Austria in 1938.

In 1989 he helped organise the Pan-European Picnic demonstration on the border of Austria and Hungary. The border was briefly opened, an event credited with helping usher in the fall of the Berlin Wall months later. Mr Habsburg then dedicated himself to having the former communist-ruled states of eastern Europe brought into the EU.

European Commission President Jose Manuel Barroso paid tribute to him as "a great European... who gave an important impetus to the European project throughout his rich life".

The last month has seen a significant rise in volcanic activity in the area, and the alert status was raised to the highest level just days ago. The eruption saw ash, sand and rocks thrown 1,500m (4,800ft) into the air, government volcanologist Kristianto was quoted as saying by the AFP news agency.

A 3.5-km (two mile) evacuation zone was established last weekend, within which around 28,000 people live, of whom 4,400 have been moved so far. Among the dozens of volcanoes in Indonesia, the 1,580-metre (5,184ft) Mount Lokon is one of the most active. It last erupted in 1991.

Unquestionably, the hacking scandal has crossed the Atlantic. The FBI's involvement takes the affair beyond the rumblings of US politicians into the much more dangerous territory of a criminal investigation. Of course, it remains to be proved whether Americans' phones were hacked.

The allegation that 9/11 victims were targeted by the News of the World was made by a rival British newspaper, the Daily Mirror, which based its report on an unnamed source. If evidence of US hacking is uncovered, the scandal will take on a whole new dimension - especially if it touches upon the emotive subject of 9/11.

The company could face a second line of enquiry, into whether payments to British police officers breached US anti-corruption laws.

On one side of the Atlantic, the eurozone debt crisis has spread to the countries that may be too big to save - Spain and Italy - though RBS thinks a 3.5 trillion euros rescue fund would ensure survival of Europe's currency union. On the other side, the recovery has sputtered out and the printing presses are being oiled again. Brinkmanship between Congress and the White House over the US debt ceiling has compelled Moody's to warn of a "very small but rising risk" that the world's paramount power may default within two weeks. "The unthinkable is now thinkable," said Ross Norman, director of thebulliondesk.com.

Fed chair Ben Bernanke confessed to Congress that growth has failed to gain traction. "Deflationary risks might re-emerge, implying a need for additional policy support," he said. The bar to QE3 - yet more bond purchases - is even lower than markets had thought. The new intake of hard-money men on the voting committee has not shifted Fed thinking, despite global anger at dollar debasement under QE2.

Fuelling the blaze, the emerging powers of Asia are almost all running uber-loose monetary policies. Most have negative real interest rates that push citizens out of bank accounts and into gold, or property. China is an arch-inflater. Prices are rising at 6.4 per cent, yet the one-year deposit rate is just 3.5 per cent. India's central bank is far behind the curve.

"It is very scary: the flight to gold is accelerating at a faster and faster speed," said Peter Hambro, chairman of Britain's biggest pure gold listing Petropavlovsk. "One of the big US banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money."

Step by step, the world is edging towards a revived Gold Standard as it becomes clearer that Japan and the West have reached debt saturation. World Bank chief Robert Zoellick said it was time to "consider employing gold as an international reference point." The Swiss parliament is to hold hearings on a parallel "Gold Franc". Utah has recognised gold as legal tender for tax payments.

A new Gold Standard would probably be based on a variant of the 'Bancor' proposed by Keynes in the late 1940s. This was a basket of 30 commodities intended to be less deflationary than pure gold, which had compounded in the Great Depression. The idea was revived by China's central bank chief Zhou Xiaochuan two years ago as a way of curbing the "credit-based" excess.

Mr Bernanke himself was grilled by Congress this week on the role of gold. Why do people buy gold? "As protection against what we call tail risks: really, really bad outcomes," he replied.

Left-leaning daily Die Tageszeitung writes:

"It's common knowledge that British politicians kowtow to the tabloid press. But that the police were also serving these papers gives the News of the World hacking scandal a new dimension. This isn't about small-time officers locating celebrity mobile phones and betraying the phone numbers of the royal family for reporters at Murdoch's big papers. The country's top police officials suppressed evidence they've had since 2005 and hindered investigations."

"Their excuse - that Rupert Murdoch's company News International (a subsidiary of his News Corporation) was uncooperative - is a declaration of bankruptcy. Of course those guilty of crimes aren't eager to help the police."

"The News of the World case has shown the British public that their democracy is a farce, with power-hungry politicians who bow to the most loathsome tabloids and money-grubbing police who hide the crimes of these papers. The investigations that Prime Minister Cameron has called for make sense only when they include all sides and lead to consequences. Most of the investigations to date... give no cause for optimism."

Conservative daily Die Welt writes:

"There is more rotten in the state of Great Britain than is dreamt of in our philosophy. And more than just in the media, whose reputation has sunk to an all-time low through the revelations about the Sunday scandal paper News of the World. But this is about more than that. The complicity of some Scotland Yard officials with the surveillance methods of the Murdoch empire are also damaging trust in the country's law enforcement."

Residents in parts of West Sussex reported buildings shaking for a few seconds at about 0800 BST. Sussex Police, Solent Coastguard and West Sussex Fire and Rescue Service said they had not been called out to any incidents related to it.

David Kerridge, from the BGS, said it was the biggest incident of its kind in the area for nearly 300 years. He said: "This is the largest earthquake in this area since a magnitude 4.5 event in 1734. Historically, there have been two other significant events nearby - a magnitude 5.0 earthquake in 1878 and a magnitude 4.3 earthquake in 1750."

The secretary for relations with states in the Vatican Secretariat spoke in his homily Tuesday about the urgency of conversion. He lamented a "loss of European roots. Blinded by progress and well-being, the men of today are only interested in material goods and forget God, or live as if he didn't exist," the archbishop said.

He recommended taking inspiration from the example of St Benedict, patron of Europe. It was the day after the feast of the saint, whom Benedict XVI had mentioned Sunday in the Angelus address. Archbishop Mamberti exhorted the Old World to "find in its culture and in its roots the necessary strength for a spiritual and humanist rebirth."

United Europe - At the end of the Mass, the archbishop and the members of the Diplomatic Corps recollected themselves before the tomb of Blessed John Paul II. Hanna Suchocka, Polish ambassador to the Holy See, thanked the participants and expressed the wish that the Polish Pope will be considered by all as the "patron of a united Europe able to breathe fully with her two lungs."

"Real M1 deposits in Italy have fallen at an annual rate of 7 per cent over the last six months, faster than during the build-up to the great recession in 2008," said Simon Ward from Henderson Global Investors. Such a dramatic contraction of M1 cash and overnight deposits typically heralds a slump six to 12 months later. Italy's economy is already vulnerable - industrial output fell 0.6 per cent in May, and the forward looking PMI surveys have dropped below the recession line.

"What is disturbing is that the numbers in the core eurozone have started to deteriorate sharply as well. Central banks normally back-pedal or reverse policy when M1 starts to fall, so it is amazing that the European Central Bank went ahead with a rate rise this month," Mr Henderson said. Italy has to roll over or raise 1 trillion euros over the next five years, with a big spike as soon as August. "Any new issuance will be above the average rate. That is the real cause of the destructive market action," said Paul Schofield from Cititgroup. The IMF has endorsed Italy's 40 billion euros austerity package, though the measures are "back-loaded" with most of the pain in 2013.

However, RBS said the eurozone storm is far from over. "We expect the crisis to continue deteriorating, and threaten to undermine the entire euro area as European policy-makers still misunderstand market dynamics. They show no sign of catching up with reality," said Jacques Cailloux, the bank's Europe economist.

Mr Cailloux said the EU's bail-out machinery (EFSF) must be increased to nearly 3.5 trillion euros in committed funds to staunch the crisis. This would give the authorities effective firepower of 2 trillion euros. "It is a lot of money but the euro is a big project. This is all about political appetite. The longer they wait, the worse it gets."

"The possibility remains that the recent weakness may prove more persistent," Mr Bernanke told the House Financial Services Committee yesterday. Such a scenario would imply "a need for additional policy support", he said. The comments from the Fed chairman came just a few hours before the ratings agency Moody's warned that the US will lose its prized triple AAA credit rating if Congress fails to lift the country's $14.3 trillion debt ceiling.

The political gridlock on Capitol Hill over the debt ceiling has only intensified anxieties over the economy's faltering recovery. Failure to strike agreement before the August 2 deadline is likely to trigger a first default by the US government. Wall Street, however, seized on the earlier hint by the Fed chairman that the central bank would consider a further round of quantitative easing (QE), or other measures, should the world's largest economy weaken further. The Fed ended its second and far more controversial round of QE, dubbed QE2, last month.

Meanwhile in Europe, leaders were struggling on how to include the private investors in any restructuring of Greece's debt. Germany is insistent that the private sector is involved before it signs off on any further bail-out. The International Monetary Fund backed that call yesterday.

A September 18, 2009, State Department cable on the issue was prepared for an international meeting of the MTCR that year in Rio de Janeiro. The MTCR is an informal association of 34 states that seeks to limit exports of missiles with ranges greater than 185 miles and warheads heavier than 1,000 pounds.

Sent under Secretary of State Hillary Rodham Clinton's signature, the cable included a report on Chinese missile proliferation that on three occasions referred to a "lack of political will" by China to stop missile transfers. "Chinese authorities and firms fail to conduct sufficient evaluations of missile-applicable transactions or to take steps to know their customers," the report said.

Several cables, labelled "secret," were made public on Monday by the anti-secrecy site WikiLeaks, showing Chinese violations or circumventions of the accord.

The Aaa ratings of financial institutions directly linked to the US government, including Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks, were also put on review for cuts, Moody's said in a statement today.

The US, rated Aaa since 1917, was put on review for the first time since 1995 on concern the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes even though the risk remains low, Moody's said. The rating would likely be reduced to the Aa range and there is no assurance that Moody's would return its top rating even if a default is quickly cured.

"It certainly underscores the importance of passing the debt ceiling and not putting us in default status, and making sure there's a longer term fiscal plan to contain spending and the deficit we've been running up over the last few years," said Anthony Cronin, a Treasury bond trader at Societe General SA in New York, one of the 20 primary dealers that trade with the Federal Reserve. "Maybe it's the impetus to say we'll need more of a concession."

With tensions running high in Washington political circles as the clock ticks towards an August 2 deadline for raising the national debt ceiling, the two sides will return for a fifth straight day of talks seemingly farther apart than ever. The meeting follows an acrimonious session Wednesday that laid bare the stark differences between the Democratic president and his Republican rivals over taxes and deficits, a battle whose outcome could have big implications as Obama seeks re-election in 2012.

Heightening the sense of anxiety hanging over already shaky negotiations, Moody's Investors Service jolted Washington on Wednesday with a warning that the United States may lose its top credit rating in the coming weeks if the $14.3 trillion (8.8 trillion pounds) limit on America's borrowing was not raised. That sent the US dollar tumbling against most major currencies. Stock futures and debt prices also fell. The round of talks following Moody's warning was the stormiest yet. Obama told Republicans "Enough's enough" before ending a session that was marked by partisan recriminations, which raised more questions about whether a deal can be reached.

An agreement must be forged to raise America's debt limit by August 2 or the government will run out of money to pay its bills and default on some obligations, but the two sides have failed so far to bridge a sharp divide over taxes.