The Corps said in a letter to the state's environmental commissioner that it was abiding by federal guidelines but that officials were now "exploring possible drought contingency options." Corps officials say state and federal regulations require them to send water downstream. Gov. Sonny Perdue said he will sue.

"The Corps' nonsensical action to further release vital water from Georgia's already depleted federal reservoirs must not stand," he said. "There is simply no scientific justification to operate these reservoirs in this manner during a historic drought like the one we are experiencing."

Millions of gallons of water are sent downstream to Florida and Alabama. The drought has heightened tensions among the three states, which already disagree on how to manage the region's limited water supply.Florida has complained the state is not sending enough water downstream to protect mussels, and the state's environmental chief sent a letter to the Corps on Wednesday that warned reducing the water flow "would severely impact Florida's natural resources."

Alabama Gov. Bob Riley has urged the Corps to release more water from Georgia's lakes to help his state cope with the dry conditions."People in Georgia have been hurting. They've lost businesses, jobs and income. And we don't want to see any more harm come to anyone, but we have obligations to manage this basin." More than a quarter of the Southeast is covered by an "exceptional" drought -- the National Weather Service's worst drought category -- and Georgia is taking extreme measures to conserve water.

Officials last month banned virtually all outdoor watering across the northern half of the state, restaurants are being asked to serve water only at customer request and the governor has called on Georgians to take shorter showers.

With a dry winter in the forecast and an estimated 81 days of stored water left in Lake Lanier, the north Georgia reservoir that supplies water to about 3 million residents, the state is considering more restrictions regardless of the Corps' decision. "The crisis will not end anytime soon," Couch said. "So now is the time for all Georgians to come together as families and communities to be good stewards and be mindful of how they use water."

"The North's food inventory has almost hit the bottom, so unless there's an extraordinary measure to stabilise supply, there may be a situation next year similar to the late 1990s," a study by the Korea Rural Economic Institute (KREI) said.

Famine in the late 1990s brought about by flooding, drought and years of mismanagement in the farm sector killed as many as 10 percent of the North's 22 million people, according to some estimates. The KREI study said North Korea will run about 1.4 million tonnes short of the food needed to feed its people and estimated damage to its farming sector at more than $275 million.

North Korea has said flooding in August was some of the worst to hit the country. It killed at least 600 people, left more than 300,000 homeless, destroyed thousands of buildings and wiped out more than 11 percent of its farm land, its official media said.

While Hitler's main legacy -- the murder of 6 million Jews and the destruction caused by the war -- is undisputed, the controversial views of blonde-haired, blue-eyed Eva Herman have grabbed the headlines in Germany for more than a week. Last month, public network NDR sacked Herman, a presenter on a flagship news program for 18 years, for saying she regretted that family values nurtured by the Nazis had been swept away.

The Nazis encouraged women to stay at home, look after their husbands, and produce and rear children. Last week the 48-year-old was thrown off a talk show after refusing to apologise and pointing out Germans were still driving on roads built during the Third Reich.

Many commentators have accused Herman, who rejects any links to far-right parties, of being provocative, dangerous and stupid but a Forsa poll showed a quarter of Germans think the Nazis had some good points. "The insecurity about how to deal with Nazism is huge. As is ignorance. Eva Herman has unwittingly kicked off a long-neglected debate," Stern magazine wrote in a cover story.

That debate is highly sensitive as Germany fights rising right-wing motivated crime and after a spate of racist attacks, especially in the former communist East.

Labor Department figures showed the number of people seeking unemployment benefit had leapt by the largest amount since February. The data boosted expectations that US interest rates could be cut further before the end of the year.

In afternoon trading on Wednesday, the euro hit a high of $1.4305, before pulling back slightly. It broke the previous record, set on 1 October, when one euro bought $1.4282.

The treaty is designed to replace the European Constitution that was rejected by French and Dutch voters in 2005. It includes plans for an EU foreign policy supremo, a longer-term president and fewer national veto rights. Officials are upbeat that a deal can be clinched in the Portuguese capital, but several countries still have concerns about some clauses of the document. Agreement at the two-day summit would end one of the most serious crises in the EU's history after the rejection of the constitution, the BBC's Oana Lungescu in Lisbon says.

"I hope this will not be the battle of Lisbon," European Commission President Jose Manuel Barroso said on the eve the talks. "We have a very good agreement on the table, the best on offer," he said. Portuguese Prime Minister Jose Socrates, whose country currently holds the EU presidency, said EU leaders were "getting very close indeed to a new treaty which will be called the Lisbon Treaty".

If the EU leaders approve the new text by Friday, they could formally sign it in December. Member states will then have a year to ratify the treaty so that it could come into effect, as planned, in January 2009. Despite Mr Brown's pledge to defend Britain's many opt-outs from the treaty, there are growing demands for a referendum. A poll published on Thursday shows that a majority of people in the EU's five biggest countries, including Britain, would like to have a say, although they are unlikely to get it.

The event, taking place in Vienna, then Linz and Graz, will allow would-be divorcees to consult lawyers about their rights and seek advice. The divorce rate in Austria hit an all time high of 50% in 2006, with 66% of marriages in Vienna ending in divorce. The two-day fair is being held under the motto "New beginning".

The Vienna event takes place over 27-28 October, with Saturday reserved for men, and Sunday for women, so couples can avoid awkward encounters and retain a degree of anonymity. Organiser Anton Barz says it is a world first and hopes it will become a twice-yearly event.

"Until now, I organised wedding fairs but while talking to associations and lawyers who told me about the difficulties of divorce, I had this idea," he said. Up to 20 exhibitors have registered so far, not only lawyers and mediators, but also estate agents, life-crisis experts, private detective firms and DNA laboratories offering paternity tests. One company will offer therapeutic package holidays for newly divorced people.

There will also be a series of lectures on subjects like how divorce affects children and coping as a single parent.

Apart from the dollar, the IMF's economists also think sterling is overvalued, while the Japanese yen and the Chinese renminbi remain too cheap compared with other currencies. In some of its strongest language to date, the fund's officials call on China to let its currency appreciate. Repeating its demand for "greater flexibility" of China's managed currency, the IMF added that such action was in China's best interests.

"Further upward flexibility of the renminbi, along with measures to reform the exchange rate regime and boost consumption, would also contribute to a necessary rebalancing of demand and to an orderly unwinding of global imbalances," the World Economic Outlook argued.

Even with slower growth forecast for the US and a weaker dollar, the IMF sees little improvement in the world's huge trade imbalances, embodied in the US trade deficit and corresponding surpluses in Asia and in oil exporters.

THE FUND THINKS THAT THE US CURRENT ACCOUNT DEFICIT WILL REMAIN CLOSE TO 1.5 PER CENT OF WORLD OUTPUT UNTIL 2012, RAISING THE LIKELIHOOD OF A DISORDERLY PLUNGE IN THE DOLLAR AND PROTECTIONISM GROWING OVER THE NEXT FEW YEARS.

The International Monetary Fund says that British property is even more inflated than in the US before prices plummeted - a disaster that caused turmoil in stock markets and saw many thousands lose their homes. In its half-yearly health check on the global economy, the IMF singles out three nations at severe risk.

"Housing markets have boomed in a number of fast-growing countries, most notably Ireland, Spain and the UK," it says. London would bear the brunt of any crash. The IMF added: "The extent of house price over-valuation may be considerably larger in some national markets in Europe than in the US, and there would clearly be a sizeable impact on the housing markets in the event of a widespread credit crunch."

In America, the collapse in housing prices and a rise in borrowing costs saw many home owners unable to keep up repayments on mortgages.

We've got a leader in Iran who has announced that he wants to destroy Israel," Bush said at a White House press conference after Russia cautioned against military action against Tehran's supect atomic program. "So I've told people that, if you're interested in avoiding World War III, it seems like you ought to be interested in preventing them from having the knowledge necessary to make a nuclear weapon," said Bush.

The EU's trade relationship with China is "deeply unequal", its trade commissioner Peter Mandelson has said.

In a frank letter to the European Commission president, he suggested that China took business in Europe for granted. China is now the EU's biggest source of manufactured goods.

But Mr Mandelson said that tariff barriers and Chinese interventions were limiting how much the EU sold to the Asian giant - costing firms billions. The letter added that the Chinese were "procedurally obstructive" where dialogue had been set up.

THE EU SOLD MORE GOODS TO SWITZERLAND THAN IT DID TO CHINA, the letter to Jose Manuel Barroso said, adding that THE TRADE DEFICIT BETWEEN THE EU AND CHINA WAS GROWING AT ABOUT £10M EVERY HOUR. "The Chinese juggernaut is, to some extent, out of control," Mr Mandelson added.

The BBC's Jonny Dymond, who has seen the letter, says that the trade commissioner 's letter "effectively accuses China of taking the mickey. The message behind the letter looks pretty clear - that Europe has rolled over long enough," our reporter added.

Mr Mandelson told the BBC that pressure from the public and politicians for a level playing-field of trade was growing. "If we want to sustain a policy of openness towards China politically, we have to make sure that the public is satisfied that that trading relationship is being conducted on full and fair trade, otherwise we are going to be in trouble."

China was "shifting the economic and diplomatic scenery so fast that it is almost impossible for policy makers to keep up let alone be ahead of the game", he added. "Because of China's extraordinary economic growth as well as its political and diplomatic reach, and the effect it can have on global security, we are seeing China changing the whole global landscape in so many different ways."

The vote overshadowed a U.S. government report that crude oil and gasoline inventories overall rose more than expected last week. But prices did draw some support from a 200,000 barrel decline in inventories at the closely-watched New York Mercantile Exchange delivery terminal in Cushing, Okla. Light, sweet crude for November delivery rose $1.09 to $88.69 a barrel on the Nymex after rising to a record $89 earlier.

Oil prices initially fell after the Energy Information Administration reported that crude inventories rose by 1.8 million barrels during the week ended Oct. 12, more than the 1 million barrel increase analysts surveyed by Dow Jones Newswires, on average, had expected. But prices reversed course and rose after the Turkish parliament vote. Traders worry that any escalation in the conflict between the Kurds and Turkey will cut oil supplies from northern Iraq. Despite the decision, Turkey's government said an incursion into Iraq isn't imminent.

Many analysts believe speculative investing is the real culprit behind higher prices. Traders see technical signs in the differences between current and future oil contracts that suggest money continues to be plowed into oil futures. And those signals precipitate new buying, which pushes prices even higher. "I think the market has been trading on momentum," said Antoine Halff, head of energy research at Fimat USA LLC.

Despite the nonsense put out by economists at the Federal Reserve and other centers of misinformation, food and energy are the most important components of the consumers' spending basket. And, the wallets of about two billion consumers are being filled by economic growth in China and India. They are spending that money on improving and increasing their consumption of food.

Consumption of all the major grains has increased. In total, global annual consumption of just these four grains increased by 80 million tonnes in five years. Remember, this higher demand must be satisfied by Agri-Food production that is constrained on the supply side. Agri-Food production is not like a factory. We can not just turn a dial and increase production.

The ability of the globe to produce Agri-Foods is constrained by the total amount of productive farm land. In the past five years the United States, for example, lost 10 million acres of farm land. Europe has moved to eliminate any farm land set aside, and will be planting essentially all available farm land in the next year.

Higher demand up against constrained supply means higher prices. Higher food prices are inevitable!

Data from the US Treasury showed outflows of $163bn (£80bn) from all forms of US investments. "These numbers are absolutely stunning," said Marc Ostwald, an economist at Insinger de Beaufort. Asian investors dumped $52bn worth of US Treasury bonds alone, led by Japan ($23bn), China ($14.2bn) and Taiwan ($5bn). It is the first time since 1998 that foreigners have, on balance, sold Treasuries.

Mr Ostwald warned that US bond yields could start to rise again unless the outflows reverse quickly. "Woe betide US Treasuries if inflation does not remain benign," he said. The release comes a day after the IMF warned that the dollar was still overvalued and likely to face "some depreciation in the medium term".

The US requires $70bn a month in capital inflows to cover its current account deficit, but the key sources of finance are drying up one by one. BNP Paribas said America has relied on "hot money" from abroad to cover 25pc to 30pc of the US short-term credit and commercial paper market over the last two years.

This flow is now in danger after the seizure in parts of the market over the summer and after the Federal Reserve's half point rate cut, which has shaved the US yield advantage over other countries. Ian Stannard, a Paribas currency analyst, said the data was "extremely negative" for the dollar. "It exceeds the worst fears. It is not just foreigners who are selling US assets. Americans are turning their back as well," he said.

Central banks in Singapore, Korea, Taiwan, and Vietnam have all begun to cut purchases of US bonds, or signalled an intent to do so. In effect, they are giving up trying to hold down their currencies because the policy is starting to set off inflation. The Treasury data would have been even worse if it had not been for $60bn of inflows from hedge funds based in Britain and the Caymans, which needed to cover US positions at the height of the credit crunch.

Sir Christopher Ondaatje feared his warning of economic meltdown would come too late. So he wrote faster and faster, PREDICTING THAT THE PRESENT ABUSE OF MONEY IN THE FINANCIAL WORLD COULD CAUSE THE WORLD ECONOMY TO COLLAPSE, CREATING CHAOS AND CONFUSION ACROSS THE GLOBE, FROM AMERICA TO CHINA.

He foretold that the American housing bubble, based on reckless mortgage lending, would burst, with repercussions for us all. While *"The Power of Paper" was at the printers, it did. Then, another warning tremor: people started queuing to get their money out of Northern Rock branches across Britain.

"The Government says it will back Northern Rock," he says scornfully. "They don't have the money. They are desperate to get someone to buy it and get it off their back." These are dangerous times. And, make no mistake about it, Northern Rock is only the tip of the iceberg. Recent government action [to guarantee investors' deposits] may indicate that this is the end of a seriously bad beginning, BUT IT MAY BE A WARNING THAT THIS IS THE BEGINNING OF THE END!"

He lists the problems: -
THE PERILS OF DERIVATIVES,
THE SNARE OF SUB-PRIME MORTGAGES,
THE QUESTIONABLE PRACTICE OF DISGUISING AND REPACKAGING DEBT
AND THE AWFUL LACK OF TRANSPARENCY ABOUT WHAT IS REALLY GOING ON.

His final prediction is that the purchasing power of the dollar and the pound will be only 10 per cent of what it is now in 10 years' time - maybe five.

* 'The Power of Paper' by Christopher Ondaatje (HarperCollins)

The Syrian envoy disclosed the nature of the target during a meeting of a UN committee where Israeli envoys were also present. A senior source in the Foreign Ministry confirmed that the statement was made in New York by the Syrian official.

Since first announcing on September 6 that an incursion into Syrian airspace by IAF jets took place, Syria has attempted to strike a balance between mustering international condemnation of Israel on the one hand and efforts by Damascus to blur the nature and purpose of the facility attacked on the other hand.

Israel continues to keep mum on the affair, and the only information cleared by the military censor for publication was the fact that a strike took place; any other information published in Israel continues to be accompanied by the phrase "according to foreign media outlets."

Israeli analysts estimated that the government's decision not to disclose information about the strike was intended to avoid embarrassing Assad's regime, in the hope that silence on Israel's side could prevent the tension between the two countries from escalating into all-out war.