In a remark which may have been aimed at Italy's beleaguered prime minister, Pope Benedict XVI told an audience of police officers that public officials must "rediscover their spiritual and moral roots". The pope's remarks echoed comments on Thursday by his secretary of state, Cardinal Tarcisio Bertone, who urged public figures to be "committed to a more robust morality, a sense of justice and lawfulness".

Berlusconi reportedly told his weekly cabinet meeting the cardinal's comments were too vague and generic to have been intended for him.

Berlusconi is formally under investigation on suspicion of paying a juvenile prostitute and then abusing his authority to cover up the fact. The Vatican's stance could be crucial to Berlusconi's chances of survival. He has done the Roman Catholic church a number of favours, providing it with tax breaks and closely following the Vatican's teachings on ethical issues such as euthanasia and in-vitro fertilisation.

"A behaviour that has become typical may still express the problems that once caused us to see it as pathological," MIT professor Sherry Turkle writes in her new book, Alone Together, which is leading an attack on the information age.

Turkle's book, published in the UK next month, has caused a sensation in America, which is usually more obsessed with the merits of social networking. She appeared last week on Stephen Colbert's late-night comedy show, The Colbert Report. When Turkle said she had been at funerals where people checked their iPhones, Colbert quipped: "We all say goodbye in our own way."

Turkle's thesis is simple: technology is threatening to dominate our lives and make us less human. Under the illusion of allowing us to communicate better, it is actually isolating us from real human interactions in a cyber-reality that is a poor imitation of the real world. But Turkle's book is far from the only work of its kind. An intellectual backlash in America is calling for a rejection of some of the values and methods of modern communications. "It is a huge backlash. The different kinds of communication that people are using have become something that scares people," said Professor William Kist, an education expert at Kent State University, Ohio.

Three former Anglican bishops have been appointed to lead the Ordinariate. Ordinariates allow Anglicans opposed to developments including women bishops, gay clergy and same-sex blessings to convert to Rome while maintaining some of their traditions. The Bishop of Brentwood, the Right Reverend Thomas MacMahon, said the Anglicans were unhappy about the church's general move away from the traditions it once shared with Catholics, but described the decision as "a very big move".

"They relinquish their present post, a very big thing, leaving some of their people which brings heartache, into a fairly unknown future, as this ordinariate has only just been brought up. It calls for huge faith and huge trust because the future isn't that certain," he said. Three vicars in Chelmsford, Hockley and Benfleet are among those men being trained to become Catholic deacons. A seventh retired Anglican vicar is also converting.

The Vatican will allow them to maintain a distinct religious identity and spiritual heritage within the Ordinariate.

The results highlight the mixed outcome of the two largest bets the bank's former chief executive, Kenneth Lewis, made at the height of the financial crisis in 2008 - the purchases of Countrywide Financial Inc and Merrill Lynch & Co. Bank of America is still coping with Countrywide's loan woes nearly three years after buying the largest US subprime mortgage lender. In the fourth quarter, the bank recognized a $2 billion (1 billion pounds) writedown in the value of its mortgage business, and a $4.1 billion provision for future mortgage repurchase claims.

"Countrywide is still hurting them and it will continue to. It's like a tooth being pulled - it's only going to feel good when it's done," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel Inc in Cincinnati. BofA Chief Executive Brian Moynihan, speaking on CNBC, said the US housing market would continue to bump along the bottom, and the banking industry would be dealing with related problems for years to come.

Almost four in ten of all the foreign-born people in the country live in London, the Office for National Statistics said. They make up 34 per cent of the capital's population. Around one in six of the population of the capital have arrived in Britain since 2000.

Cynthia Ebinger, a geologist from the University of Rochester in New York, could hardly believe what the caller from the deserts of Ethiopia was saying. It was an employee at a mineralogy company - and he reported that the famous Erta Ale volcano in northeastern Ethiopia was erupting. Ebinger, who has studied the volcano for years, was taken aback. The volcano's crater had always been filled with a bubbling soup of silver-black lava, but it had been decades since its last eruption.

The call came last November. And Ebinger immediately flew to Ethiopia with some fellow researchers. "The volcano was bubbling over; flaming-red lava was shooting up into the sky," Ebinger told Spiegel Online. The earth is in upheaval in northeastern Africa, and the region is changing quickly. The desert floor is quaking and splitting open, volcanoes are boiling over, and seawaters are encroaching upon the land. Africa, researchers are certain, is splitting apart at a rate rarely seen in geology.

For now, no one can really say when the sea will finally flood the desert. But when it does, it could go quickly. "The hills could sink in a matter of days," Tim Wright, a fellow at the University of Leeds' School of Earth and Environment, said at a recent conference hosted by the American Geophysical Union (AGU) in San Francisco.

In the last five years, the geologic transformation of northeastern Africa has "accelerated dramatically," says Wright. Indeed, the process is going much faster than many had anticipated. In recent years, geologists had measured just a few millimeters of movement each year. "But now the earth is opening up by the meter," says Loraine Field, a scholar at the University of Bristol who also attended the conference.

Earth tremors cause deep fissures to form in the desert floor and the ground in East Africa is shattering like broken glass. Researchers in the Gulf of Tadjoura, which juts into Djibouti from the Gulf of Aden, have recently registered a barrage of seismic shocks. "The quakes are happening on the mid-ocean ridge," Ebinger reports.

The paper quoted a senior administration official as saying US President Barack Obama's warning had persuaded China - the North's main diplomatic and economic backer - to take a harder line towards Pyongyang, and opened the door to a resumption of inter-Korean talks, possibly next month.

North Korea on Thursday accepted the South's conditions for talks, marking a major breakthrough in the crisis on the peninsula. Such dialogue could clear the way for the resumption of aid-for-disarmament, or six-party, talks. The New York Times said Obama warned his Chinese counterpart that if Beijing did not step up pressure on North Korea, Washington would redeploy its forces in Asia to protect itself from a potential North Korean strike on US soil.

Obama first made the warning in a phone call to Hu last month, and repeated it over a private dinner at the White House on Tuesday, the US administration official said. Wang Dong of Peking University's School of International Studies said Washington's reported warning to Beijing was a slap in the face for the Chinese leader, who has urged the two Koreas to resolve their differences through dialogue.

"Playing tough like this, it might just backfire, I'm afraid," Wang said. "If this article represents the real thinking by American leaders, the danger of war on the peninsula can never be dismissed."

"When Congress is asked to increase the statutory debt limit, which will likely happen in the next few months, I will vote no, unless, and let me be completely clear here, there is a firm commitment to deal with the larger issue or the vote itself is tied to a plan to put America on a path to financial responsibility," Wolf said.

Republicans voted nearly unanimously last year against raising the debt ceiling. But this time, they have the numbers in the House to actually derail it. Treasury Secretary Tim Geithner and other Obama administration officials have warned against this temptation, saying it could throw the nation into default, and so far most members of Congress have been cautious in announcing how they'll vote.

But Wolf warned that if the debt is not curbed, America could fall off a fiscal cliff and watch countries like China take its place. "For too long, routinely increasing the amount of money the government can borrow without taking any action to stem the country's growing debt has been standard operating procedure. But the storm warning signs have been posted. And I'm heeding their ominous call," he said. "We can no longer ignore the albatross of debt around our collective necks."

Elsewhere on the Hill Thursday, three Republican lawmakers put forward a plan they claim will cut out $2.5 trillion over the next decade. The Spending Reduction Act - unveiled by Representatives Jim Jordan of Ohio, Scott Garrett of New Jersey and South Carolina Senator Jim DeMint - would start by rolling back spending to 2008 levels and repealing unspent stimulus dollars. From there, it would reduce the size of the federal civilian workforce and target other federal programs.

The events cast the crisis into an unpredictable moment, as each side became ever more entrenched in positions with little common ground over indictments expected to name members of Hezbollah, the Shiite Muslim militant movement, in the assassination of the prime minister's father, Rafik Hariri.

The 17-minute speech by Prime Minister Saad Hariri was delivered just hours after Turkey and Qatar announced that they had abandoned work on their diplomatic initiative. It focused the long-running confrontation in this flammable country between Mr Hariri's supporters, backed by the United States and France, and Hezbollah and its allies, backed by Iran and Syria, squarely on Mr Hariri himself.

In his address, he said he would seek to form a new government in talks next week, defying demands by Hezbollah and its allies that he step down and raising the prospect that the militant movement may revert to the street - be it through protests, labor strikes or even violent confrontations - to ensure that Mr Hariri is unable to do so.

Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.

Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state's bonds could suffer, possibly ending up at the back of the line as unsecured creditors.

"All of a sudden, there's a whole new risk factor," said Paul S Maco, a partner at the firm Vinson & Elkins who was head of the Securities and Exchange Commission's Office of Municipal Securities during the Clinton administration. Discussion of a new bankruptcy option for the states appears to have taken off in November, after Mr Gingrich gave a speech about the country's big challenges, including government debt and an uncompetitive labor market.

Mr Hu met leading US politicians and was quizzed on a number of issues, before departing for Chicago. There he joined Chicago Mayor Richard Daley and other business and political leaders for a dinner in his honour. Mr Daley, who has been in office for 22 years, has visited China four times since 2004 and has promoted Chicago, America's third-largest city, as a global transportation hub with a large and capable manufacturing sector.

Speaking at the dinner, Mr Hu said: "Despite the great distance between Chicago and China, our hearts are linked together by friendship." Mr Daley said Chicago's long-range goal was to be "the most China-friendly city in the US". Chicago is Mr Hu's only stop in the US outside the US capital. On Friday, he will visit a Chinese language and cultural centre based in the city.

In a speech earlier at a Washington DC lunch with senior US officials and business leaders from firms like General Electric, Coca-cola and Boeing, Mr Hu pledged China would "remain committed to the path of peaceful development". He said: "We do not engage in arms races, we are not a military threat to any country. China will never seek to dominate or pursue an expansionist policy."

As reported by the Ethiopian government, last week, during Niebel's visit to Addis Ababa, Prime Minister Meles Zenawi made reference to the development of the situation in Somalia, which, in his opinion, calls for "serious initiatives". Niebel then invited him to attend the Munich Security Conference. Since some time, the Ethiopian government has been seeking to play itself up as the West's stabilizing power at the Horn of Africa, which is why it is being groomed by Berlin.

Human rights organizations' grave accusations against Addis Ababa have dissipated without effect. The most recent accusations are about the leasing of gigantic plots of Ethiopian land to foreign - including German - agro-businesses for the low-priced cultivation of agricultural export goods, while Ethiopians are starving. At his meeting with the Ethiopian Prime Minister, German Development Minister Niebel called for legal safeguards favorable to German investors, to induce more profitable German activities in this East African country.

The discussion of possible new operations against Somalia is taking place at a time when Berlin is worrying about maritime traffic off the Somali coast, not just because of pirates, who, in spite of the multi-national naval presence in those waters, are still occasionally successful in hijacking vessels. German naval experts are pointing to the fact that India and China are strengthening the presence of their fleets in the Indian Ocean, which, perspectively, would include the area off the coast of Somalia and the entry to the Red Sea. In addition, the Yemeni government is losing control over a portion of its territory to anti-Western forces.

Before arriving in Addis Ababa last week, Development Minister Niebel visited Yemen to initiate new stabilization measures. Niebel warned that, if the situation in the country gets out of hand, both countries at the entrance to the Red Sea - Somalia and Yemen - would no longer be accessable. "That is one of the reasons for our engagement and our aid in stabilization." The Red Sea is the transit route for a large portion of German commerce with Asia, which is constantly growing in significance, particularly thanks to the booming economy of the People's Republic of China.

It didn't: on balance they still preferred to spend Germany's money rather than earn their own. Now Angela Merkel has made it obvious she is fed of trying to get the rest of the continent out of bed in the morning. But the merest hint that she might stop paying the bills has spooked the financial markets. That is the fundamental flaw at the heart of the euro which has fuelled the wave of speculation against it in recent days. The markets do not believe you can have a lasting monetary union without a political union which allows you to make such payments.

If the decision were to be taken by economists, the eurozone would probably break up - or contract into an inner core of honorary Germans alongside the genuine article. But the euro is nothing if not political in origin and purpose: it was born of a desire by the leaders of Germany and France to weld their countries together so they would no longer fight but could create a bloc powerful enough to stand up to the US. That desire is as strong as ever.

Would it matter if Merkel lost her battle with the markets and the euro disappeared? Doomsters in the City say it would be worse than the collapse of Lehman Brothers because the break-up would be a prelude to wholesale devaluation by the weaker governments. These could then no longer afford to keep up the payments on their euro-denominated debt with their relaunched but devalued drachma, pesetas or escudos. There would be wholesale default. It would cause chaos.

But it is the kind of chaos the world has experienced before, as in 1982 when Mexico, Brazil, Argentina and Zaire all defaulted within weeks of each other. It hurt the banks, but it was a far more orderly meltdown than the collapse of Lehmans: everyone knew where the debt was and who to avoid. And in more recent times, when Yugoslavia, Czechoslovakia and the Soviet Union broke up, the collapse of their single currencies was the least of their worries. Did anyone even notice?

What everyone needs to grasp is that when debt is the problem, inflation can be the least painful solution, and when crunching economic readjustment is necessary, inflation can oil the moving parts to make the transition smoother and less painful. Economists have known this for years - at least since Keynes in the 1930s - but, like so much else, it has been forgotten in recent times.

Tax revenues rise as people move into higher income bands, business can scale back wage costs by pegging pay increases to less than the inflation level, and these measures reduce demand without the additional pain of unemployment. And all the time the real value of the debt burden is eroded.

Indeed, one reason this global debt problem is proving harder to resolve than the others which have happened down the centuries is that this time inflation in most parts of the word is so low. Indeed, it is the absence of inflation in Japan for almost 20 years that has saddled the country with a debt burden of almost 200% of GDP, and no chance of lightening it.

Inflation running at 4% reduces the overall debt burden by almost 25% in five years and virtually halves it in nine years. Obviously it is not a free lunch. Inflation rewards the feckless and indebted but PUNISHES PRUDENT SAVERS AND THOSE ON FIXED INCOME. It can also get out of hand and rise to a point where its evils more than cancel out its beneficial effects. But not provided it is held at modest levels.

As the economists Franco Modigliani and Robert Solow suggested 30 years ago, society as a whole probably functions better and is happier with 5% inflation and 5% unemployment than with 1% inflation and 9% unemployment.

The decision came from Judge Lawrence Zatkoff, who changed his perspective on the issue and said just last week that he would dismiss a constitutional challenge brought by Kevin Murray against the US government's bailout of AIG, the insurance giant. That company used more than "$100 million in federal tax money to support Islamic religious indoctrination through the funding and promotion of Shariah-compliant financing. ...SCF is financing that follows the dictates of Islamic law," said officials at the Thomas More Law Center.

TMLC is representing Murray in his challenge to the use of federal tax money to promote Islam in the United States. And its chief, Richard Thompson, warned of the precedent. "Judge Zatkoff's ruling allows for oil-rich Muslim countries to plant the flag of Islam on American soil," he said. "His ruling ignored the uncontested opinions of several Shariah experts and AIG's own website, which trumpeted Shariah-compliant financing as promoting the law of the prophet Mohammed and as an ethical product and a new way of life."