Mount Sinabung, some 60km (40 miles) south-west of Sumatra's main city Medan, has not erupted for 400 years. The volcano had been pumping out smoke all day Saturday, but alert levels had not been raised, and local media reported that villagers had been taken by surprise. The Medan Tribune quoted one local resident as saying he panicked and ran when he saw lava coming towards him "like a ball of fire".

Priyadi Kardono from Indonesia's National Disaster Management Agency told the BBC that more than 10,000 people were being evacuated from nearby villages. Surono, head of the nation's volcano disaster alert centre, told AFP news agency that the alert level had been raised to red because the situation was "clearly dangerous. Initially we thought the ash and smoke were triggered by rain but now we know the driving pressure was from magma," he said.

The Indonesian archipelago lies on the Pacific "Ring of Fire" and has at least 129 active volcanoes.

The posters include pictures of Islamic Movement leader Raad Salah and Hamas leader Mohammed Abu Tir, the red-bearded politician whom Israel has banned from Jerusalem several times. Salah recently was convicted for assaulting and spitting on a policeman during a Temple Mount protest. He was sentenced to nine months in prison, but an appeals court reduced the time in jail to five months.

The Muslim Waqf, the Islamic trust that is the Muslim authority at the holy site, is "exploiting the days of [the Muslim holy month of] Ramadan to desecrate the Temple Mount while no one dares open his mouth," the Jewish activists charged. Salah is former mayor of the Arab city of Umm el Fahm, located several miles east of Hadera and the Mediterranean Coast, and has been arrested several times for violent demonstrations at the Temple Mount.

He has expanded his activities to raise millions of dollars for the Hamas terrorist organization and has revealed a strategy to work for a global movement against Jewish association with the Temple Mount and to "expose the false claims of the Zionist discourse." Salah repeatedly has declared in sermons that Jews have fabricated their connection with the Western Wall, which he claims is part of the Al Aksa mosque.

"Equity investors are in for a rude shock. The global economy is sliding back into recession and they are still not even aware that these events will trigger another leg down in valuations, the third major bear market since the equity valuation bubble burst," he said. Government bonds, which are considered lower risk assets compared with equities, have remained in demand during the crisis and yields are at a low level by historical standards - where low yields indicate strong demand.

The yield on UK benchmark 10-year bonds was 2.88 percent yesterday, and Mr Edwards forecast a further fall to below 2 percent. He predicted that "global cyclical failure" would push US 10-year yields down to 1.5 percent-2 percent, and German bunds to below 1.5 percent. "So far the equity market has shrugged off much of the weaker data that abounds, and has not joined the bond market in a perceptive move.

"The equity market will though crumble like the house of cards it is, when the nationwide [US] manufacturing ISM slides below 50 into recession territory in coming months." The ISM index fell to 55.5 in July from 56.2 in June. Mr Edwards forecast a return to the "valuation nadir last seen in 1982", with the S&P bottoming at around 450.

Another northeast Washington wildfire was burning at Fish Hatchery Road, about four miles north of Republic, in Ferry County. Kassel said that "fire burned more than 350 acres and threatened 50 homes but firefighters were making progress. A fast-moving fire northwest of the Klickitat County town of Lyle had grown to 2,000 acres, or 3 square miles, some homes were threatened and one outbuilding had burned."

In southeast Washington, Kassel said a fire east of Dayton had burned about 300 acres of grassland. The wildfires also led to numerous intermittent road closures in the region

That's a sharp slowdown from the first quarter, when the economy grew at a 3.7 percent annual rate, and economists say it's a taste of the weakness to come. The current quarter isn't expected to be much better, with many economists forecasting growth of only 1.7 percent. Such slow growth won't feel much like an economic recovery and won't lead to much hiring. The unemployment rate, now at 9.5 percent, could even rise by the end of the year.

"The economy is going to limp along for the next few months," said Gus Faucher, an economist at Moody's Analytics. There's even a one in three chance it could slip back into recession, he said. Many temporary factors that boosted the economy earlier this year are fading. Companies built up their inventories after cutting them sharply in the recession to match slower sales. The increase provided a boost to manufacturers, but now many companies' stockpiles are in line with sales and don't need to grow as much. In addition, the impact of the government's $862 billion fiscal stimulus program is lessening.

High unemployment is making it harder for people to make their mortgage payments and stay in their homes. About 9.9 percent of homeowners had missed at least one mortgage payment as of June 30, the Mortgage Bankers Association said Thursday.

Local residents said settlers tried to reach a spring, which religious Jews view as a biblical site, by crossing through a mosque courtyard. Israeli police said Palestinians then took to the streets in violent demonstrations, throwing rocks and firebombs at police and vehicles, burning six cars. Israel captured East Jerusalem along with the West Bank in a 1967 war and regards all of Jerusalem as its capital, a claim that is not recognised internationally. Palestinians want East Jerusalem as the capital of the state they intend to establish in the West Bank and Gaza Strip.

"We're now capable of doing renminbi settlement in many parts of the world," said Chris Lewis, HSBC's head of trade for greater China. "All the other major international banks are frantically trying to do the same thing." HSBC and StanChart are among a slew of global banks - including Citigroup and JPMorgan - holding roadshows across Asia, Europe and the US to promote the renminbi to companies.

The move aligns the banks favourably with Beijing's policy priorities and positions them to profit from what is expected to be a rapidly growing line of business in the future. The phenomenon will accelerate Beijing's drive to transform the renminbi from a domestic currency into a global medium of exchange like the dollar and euro.

China has taken several steps in recent months to boost the international use of its currency and to establish Hong Kong, the special administrative region, as the global centre for offshore renminbi business. McDonald's, the US burger chain and icon of globalisation, took advantage of the new rules this month when it became the first foreign multinational to issue renminbi-denominated bonds in Hong Kong.

Global wheat production has been under threat in recent years from increasing demand and climate change. Wheat is regarded as one of the most important crops for human consumption. The results of the study, led by Neil Hall from the University of Liverpool, are available for public use.

They are meant to enable other scientists and breeders worldwide to "analyse the sequence and use it in a new breeding method called macro-assisted selection that could dramatically increase the speed and efficiency of plant breeding," said Mike Bevan, the director of the John Innes centre, who took part in the research. "This is very important these days because we could be racing against the clock of decreasing food security," he added.

Recently, Russia, one of the biggest producers of wheat, banned all export of wheat after severe drought and wildfires charred crops around the country. The move raised worldwide concerns about possible wheat shortages and has sent wheat prices soaring. Major floods in Pakistan and mudslides in China made wheat prices spike even further. Canada and several other countries also expect their wheat harvest to be much lower than last year due to weather conditions.

Polish daily Rzeczpospolita notes that France and the UK - permanent members of the UN Security Council - were initially reluctant, but eventually gave the go-ahead to a compromise whereby Lady Ashton will have the right to speak on the EU's behalf in the General Assembly but not in the Security Council.

Meanwhile, Open Europe's Sian Herbert is quoted in the Mail and on page 2 of the Express commenting on the prospective 8 million pounds that the EU is considering to spend per year to lease the new European External Action Service (EEAS) headquarters in Brussels. "The ballooning costs of the EU's new foreign service are becoming an increasing burden on British taxpayers and stand in sad contrast to the cuts facing the UK's Foreign Office, which does a much better job of representing UK citizens' interests throughout the world", she said.

When will the world finally begin to understand that we have reached the point of no return and that "the voyage of their life is bound in shallows and in miseries" (Shakespeare, Julius Caesar). Sadly, we are probably not very far from that point. It is already starting to happen in many countries.

The latest EU and IMF package of $1 TRILLION (750 billion euros) is yet another futile attempt by governments to abolish poverty by printing paper. Let's be absolutely clear, this money does not exist and the EU governments are hoping by declaring such a large amount that they can con the Wolfpack speculators. At this point the EU has just picked a large round figure out of the air. But when their bluff is called by the Wolfpack and the next attack happens, EU governments will after initial huffing and puffing start printing unlimited amounts of paper.

So the world is now on its road to ruin and there is no action, no leader and no new amount of printed money that can save the world or prevent a hyperinflationary depression. Never in history has the world been in a situation when virtually all industrialised countries are bankrupt. Therefore there is no precedent for what will happen in the next few years. What we can be quite certain about is that events will happen in a seemingly random pattern and that it will be impossible to forecast where the next crises will start.

For several years we have predicted that hyperinflation is the most likely outcome of the economic predicament that the world is in. But it is unlikely to be a straightforward hyperinflationary period. Precious metals will be the primary beneficiaries of hyperinflation. Certain commodities, especially food and energy, will also go up in price. But most assets that have been financed by the credit boom will go down in real terms. This includes property, stocks and bonds. In hyperinflationary money these assets could still go up in price.

If someone who earned $50,000 per annum in real money now earns $5 million in newly printed money, his house will probably also go up in nominal terms. But in real terms property prices will decline massively. There will be no credit available and interest rates will be very high, probably at least 15-20% so very few people will be able to buy a house. Hyperinflation will destroy many currencies so paper money will definitely reach its intrinsic value which is zero. Where will it end? It will end when the dollar and many other currencies reach their intrinsic value of ZERO. That time is not far away.

The political environment is utterly incapable of governance without melodrama. The GOP doesn't listen, and the Democrats apparently don't learn. The ultra-constipated movement of legislation regularly brings actual government to an actual standstill, it just carries on by inertia until someone condescends to pass an appropriation. Economically the nation's a disaster area, and the only notable growth in employment is for press release writers who don't particularly care what they write or why they write it.

Nothing gets done well. Wars, budgets, policies, whatever, they all stagger along in a dysfunctional daze until some new crisis emerges. This is exactly the same story as many fallen civilizations.

The rule the Romans could have taught the US is simple: "Don't go broke." Economic chaos was more common than not in the Roman Empire, and the disasters multiplied as the financial tangles and lack of money progressively beggared everything but the military.

The Chinese could have taught the US another basic lesson: "Insularity destroys countries." The Chinese went from being the most advanced nation on Earth to a primitive, closed society incapable of dealing with Western and Japanese expansion. That wasn't ancient China, by the way. It was the story of China up to 1911. Nearly a half a century of unrestrained bloodbaths did the rest.

The Russians can provide a lesson that "A monomaniacal approach to spending is fatal." The crash of the Soviet Union was a hideous event inside Russia, resulting in the life expectancy dropping by a few decades for a while. The end result was a totally different nation, much amended geographically and politically.

The British Empire has another lesson: "However big you are, ignorance and hidebound policies will wipe you out." A few wars, a lot of social and economic mismanagement, and where's the British Empire?

The US, through a truly insane, self-inflicted mix of these factors, has managed to achieve a condition which would have been unthinkable a generation ago. A complete misconception of itself has helped a lot. The US is a super power, not because of its nukes, but because of its economic clout. That clout has been reduced to a paper fan by the recession, unprecedented loss of real capital, and the shutdown of America's truly global range secret weapon, credit, now well and truly disarmed by its own operators. Trade, internal and external, is now a twitching mess of signals, with all indicators looking every way but up.

The definition of a failed state is "Can't get anything done and things keep getting worse". How close is that, would you say?

Commercial real estate in places like Las Vegas has crashed because who is out buying million dollar condos in this market? Very few and that is why you are seeing many places having vacancy rates of 50, 60, or even 70 percent.

Keep in mind that many banks have incredible amounts of CRE debt. As we just saw with existing home sales, without massive tax subsidies the market is still overpriced. CRE values are coming down to reflect their true values yet the suspension of mark to market and the ability of banks to roll over bad loans keeps price discovery hidden long enough to devise additional ways to push this toxic waste to taxpayers.

The fact that the entire banking system is now held up by taxpayer money, we have in effect nationalized the banking system with no actual benefits of nationalization. That is, all the profits go to banks while all the losses hit the taxpayer. This goes for Bank of America, JP Morgan, Wells Fargo, AIG, Goldman Sachs, Fannie Mae, Freddie Mac, FHA, and every other entity that is a ward of the state in one way or another.

Commercial real estate has gotten zero play in the mainstream media even though this is a $3 trillion market. Does the public drive by an empty condo building or strip mall and think about the larger implications? Maybe they don't and that is why the government and banks are working together to slowly work their shadow bailout.

"If there was no question about the gold being there, you think they would be anxious to prove gold is there," he said of the Federal Reserve. This is not the first time the congressman has made his pitch. "In the early 1980s when I was on the gold commission, I asked them to recommend to the Congress that they audit the gold reserves - we had 17 members of the commission and 15 voted not to do the audit," said Paul. "I think there was only one decent audit done 50 years ago," he said.

Though Paul did not say whether there is any truth to claims that there is no gold in Fort Knox or the New York Federal Reserve, he said, "I think it is a possibility. If we ever get around to deciding we should use gold in relationship to our currency we ought to know how much is there," said Paul. "Our Federal Reserve admits to nothing and they should prove all the gold is there. There is a reason to be suspicious and even if you are not suspicious why wouldn't you have an audit?" he said.

The gold audit follows his crusade last year looking to audit the Federal Reserve, which he says is the chief culprit behind the economic crisis. Since the Fed's creation in 1913 the dollar has lost more than 96% of its value, and by inflating the money supply the Fed continues to distort interest rates and intentionally erodes the value of the dollar said Paul.

As the deficit grows so does the national debt, which is currently more than $13.3 trillion, according to official figures. But the situation is actually much, much worse, according to Boston University economics professor Laurence Kotlikoff.

"Forget the official debt," he tells Aaron in this clip. The "real" deficit - including non-budgetary items like unfunded liabilities of Medicare, Medicaid, Social Security and the defense budget - is actually $202 trillion, the professor and author calculates; or 15 times the "official" numbers. "Congress has engaged in Enron accounting," says Kotlikoff, who recently penned an op-ed for Bloomberg entitled: The US Is Bankrupt and We Don't Even Know It.

Kotlikoff says that's because the market is focused on the "mole hill" of official debt. In time, the US will have a major inflation problem to rival that of Germany's post World War I Weimar Republic, he predicts. "We have to think about the fact that unless the government gets its fiscal act in order we're going to have the government printing lots and lots money to pay these enormous bills that are coming due over time." America is in need of major reform of the health-care, retirement, tax and financial system, Kotlikoff continues. "We need (to perform) heart surgery on this economy, not putting on more band-aids which is what we've been doing."

Barring that, your hard-earned dollars will soon be worthless, he declared!

That is the bizarre - and scary - rule that now applies in California and eight other Western states. The US Court of Appeals for the Ninth Circuit, which covers this vast jurisdiction, recently decided the government can monitor you in this way virtually anytime it wants - with no need for a search warrant.

It is a dangerous decision - one that, as the dissenting judges warned, could turn America into the sort of totalitarian state imagined by George Orwell. It is particularly offensive because the judges added insult to injury with some shocking class bias: the little personal privacy that still exists, the court suggested, should belong mainly to the rich.

This case began in 2007, when Drug Enforcement Administration (DEA) agents decided to monitor Juan Pineda-Moreno, an Oregon resident who they suspected was growing marijuana. They snuck onto his property in the middle of the night and found his Jeep in his driveway, a few feet from his trailer home. Then they attached a GPS tracking device to the vehicle's underside.

After Pineda-Moreno challenged the DEA's actions, a three-judge panel of the Ninth Circuit ruled in January that it was all perfectly legal. More disturbingly, a larger group of judges on the circuit, who were subsequently asked to reconsider the ruling, decided this month to let it stand.

Plenty of liberals have objected to this kind of spying, but it is the conservative Chief Judge Kozinski who has done so most passionately. "1984 may have come a bit later than predicted, but it's here at last," he lamented in his dissent. And invoking Orwell's totalitarian dystopia where privacy is essentially nonexistent, he warned: "Some day, soon, we may wake up and find we're living in Oceania."