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."

According to a report from Joseph Farah's G2 Bulletin. "One of my soldiers went without ammo for five weeks once they got to Afghanistan because of shortages. I can't reveal the name, because they are frightened of reprisals. If they can do what they did to a four star general like [General Stanley A] McChrystal, what would they do to a buck private?" That comes from a woman who, with her husband, has taken it upon herself to adopt soldiers and provide them with many of the needed basics.

The woman, assigned a pseudonym of "Beth," insisted her name not be used because of the possibility of reprisals against her or the soldiers. But she told WND she received a report that a US soldier bought a $15 knife "and slept with their hand on the handle in the waist of their pants because it was all they had for the moment to protect themselves." The woman confirmed she and her husband are involved in supplying the basic necessities for some 50 soldiers - because the military isn't.

"If the military doesn't supply what they need, they must depend on family or people like me," Beth said. "Many of these families are struggling on low wages, some parents are on disabilities and unable to help. Sending a box once a month during their deployment is not only good for their morale, but they need (to be) resupplied with many items."

The Pentagon did not respond to a request for comment on the allegations. But one soldier told Beth the work days are 18 hours long, and they have few "real meals."

Mr Baroin is quoted by Reuters saying: "We can't ask for deficit reduction on the one hand, to adhere to the logic of the stability pact, and on the other hand make demands for increases which are objectively inadmissible. We confirmed this point". He continues: "I will take the same steps with my British colleagues in a few days so that the largest contributors [to the EU budget] are heard". Two weeks ago the UK voted against this reduced increase together with six other member states, calling for deeper cuts to the overall EU budget for 2011.

Slovak PM: "When democratically elected politicians raise criticisms they have the right to do so. But European administrators do not have this right, not under any circumstances." When commenting on EU Commissioner for Economic and Monetary Affairs Ollie Rehn's public criticism for not taking part in the bailout she says: "the way in which [he], a non-elected official from Brussels, spoke about the freely elected members of the Slovakian parliament was insulting. I will demand an official apology for this from Brussels during my visit to Berlin".

"Europe must not be constituted by a big brother and many satellites which have to obey the larger, more powerful and wealthier. We remember very well what it means to be a satellite... I don't want to compare, I only want to highlight that democracy also means to listen to the arguments of those who may be very small but are aware of their responsibilities", she says in Faz. She continues: "Talk that Slovakia is acting irresponsibly must stop. To say it in all clarity: When democratically elected politicians raise criticisms they have the right to do so. But European administrators do not have this right, not at any time".

Hankel has already warned in 2005 that the Euro system is unsustainable. While I am still wondering to whom Germany will sell all the goods it now produces (and warehouses) when all important trade partners face the same economic and social problems, Hankel focuses on the adverse effects the hastily pushed through financial aid laws for Greece - which is already running into difficulties to comply with the austerity conditions that are part of the bailout - will have on Germany in the future.

He warns of dire consequences and states that Merkel may run afoul of the German constitution and her oath to stave off the German sovereign from bad damage.

Here is Hankel's letter translated into English.

Honored Federal Chancellor,

Unfortunately you have not answered my first letter dated March 27, 2010. For this reason I have to repeat my concerns as the problem approaching Germans and Europeans has become worse meanwhile.

Both the "Greek Aid Law" from May 7, 2010, as well as the following "Emergency Umbrella Law" from May 7, 2010, do not only constitute strong offences against EU law, but also against our own German constitution. You know the situation due to the legal action introduced by 5 university professors at the German constitutional court. Your assistants have informed you of this as well.

This is a case of breaking the law in the most severe way. This is even more dangerous than the economic consequences. Europe is the homeland of states ruled under the law. The Euro will not regain its former strength but it will be relegated into a European soft currency. Those countries close to a state default, especially the southern, but also the western Eurozone, will neither get out of debt nor will it change their past behaviour.

After all the money of the rescue fund does not flow to the states but to their insolvent banks. And the governments of these countries will not fulfill the conditions coming with the rescue funds, as doing so would endanger their political and economical stability. It is highly implausible when your finance minister announces austerity packages while allocating 70% of annual federal tax revenues for rescue packages whose failure is already written on the wall.

Germany and the few other still economically stable countries in the Eurozone are sinking money into a barrel without a bottom. This money, that the German taxpayers will have to come up with, will be lost for German citizens and their future. By now you had to acknowledge that our country can neither fulfill its social obligations, nor satisfy its promises to keep and create jobs. I am confident you will live to see that this austerity policy will lead to similar effects as we see them nowadays in Greece: protesting people, burning cars, shattered windows and maybe still worse actions. Can you account for this?

I appeal to you to repeal these laws before the constitutional court will nullify them. Your oath included "to fend off damage for the German people" - with this you stand the chance to do so. The emergency umbrella from Brussels will not save the common currency.

This is my and our public call to the German sovereign and to you. Realize it!

Kind regards

Wilhelm Hankel