In recent months, senior Chinese officials, including Premier Wen Jiabao, have repeatedly signalled their concern that US policies could lead to a collapse in the dollar and global inflation. But Chinese and western officials in Beijing say China is caught in a "dollar trap" and has little choice but to keep pouring the bulk of its growing reserves into the US Treasury, which remains the only market big enough and liquid enough to support its huge purchases.

In March alone, China's direct holdings of US Treasury securities rose by $23.7bn (£14.9bn) to reach a new record high of $768bn, according to preliminary US data, allowing China to retain its title as the biggest creditor of the US government. "Because of the sheer size of its reserves SAFE [China's State Administration of Foreign Exchange] will immediately disrupt any other market it tries to shift into in a big way and could also collapse the value of its existing reserves if it sold too many dollars," said a western official, who spoke on condition of anonymity.

The composition of China's reserves is a state secret but dollar assets are estimated to comprise as much as 70 per cent of the $1,953bn total. CHINA OWNS NEARLY A QUARTER OF THE US DEBT HELD BY FOREIGNERS, according to US Treasury data.

But SAFE has not fundamentally changed its strategy of allocating the bulk of its burgeoning foreign exchange reserves to US Treasury securities, a western adviser familiar with Safe thinking told the Financial Times. He said Safe traders were "very negative" on sterling because of expectations of renewed weakness of the UK currency, but SAFE was neutral on the euro and bullish on the Australian dollar.

North Korea presents a classic example of the dilemmas involved in dealing with a STATE WHOSE BEHAVIOUR IS PREDICTABLY UNPREDICTABLE. The basic rule for dealing with such states is that there is no rule. But a major consideration is how powerful they are. In 2002 Libya could be pressured into admitting and giving up a secret nuclear programme because it was weak and exposed.

NORTH KOREA HAS A MILLION-STRONG ARMY, WITH MORE THAN 4,000 TANKS AND ABOUT 18,000 ARTILLERY PIECES, according to the International Institute for Strategic Studies. Its forces are encamped only a short distance from the South Korean capital, Seoul. AN IRAQ-STYLE INVASION IS NOT POSSIBLE. So options are limited.

The long-term hope in these situations is that the regime itself will collapse. This became the solution to the Cold War. THE DANGER WITH NORTH KOREA IS THAT COLLAPSE, OR FEAR OF IT, COULD LEAD TO WAR, GIVEN THE MILITARISTIC NATURE OF ITS GOVERNMENT.

The move came as UN diplomats began work on a resolution to punish North Korea for its underground nuclear test. Diplomats said they were seeking "tough measures", including further sanctions. Mondays's nuclear test was accompanied by at least three missile tests.

The latest tests on Tuesday involved one surface-to-air missile and one ground-to-air missile, Yonhap said. They came amid widespread international concern over Pyongyang's activities. Late on Monday US President Barack Obama spoke to the leaders of both Japan and South Korea to assure them of America's commitment to security in North-East Asia.

Admiral Habibollah Sayyari, quoted by the ISNA news agency, made the announcement five days after Iran said it test-fired a surface-to-surface missile with a range of 2,000 km (1,200 miles), putting Israel and U.S. bases in the area within reach.

Iran said on May 14 it had sent two warships to the Gulf of Aden to protect oil tankers from the world's fifth-largest crude exporter against attacks by pirates but ISNA did not make clear whether they were among the six Sayyari talked about.

Iranian waters stretch along the Gulf, the Strait of Hormuz and the Sea of Oman. IRAN HAS THREATENED TO BLOCK THE STRAIT OF HORMUZ, through which about 40 percent of the world's traded oil is shipped, if it were attacked over its nuclear programme.

Tory Nadine Dorries described the media revelations as 'resembling A MCCARTHYITE WITCH HUNT', her colleague Sir Anthony Steen said they were tantamount to a 'KANGAROO COURT' and Labour's Tom Levitt - who by the way tried to claim back £16.50 for a poppy wreath he laid at his Derbyshire town's war memorial on Remembrance Sunday - called them an exercise in 'GUTTER JOURNALISM'.

Now, as if all this disingenuous bleating from inside Westminster were not bad enough, recalcitrant MPS HAVE FOUND A SPIRITUAL SUPPORTER IN THE ARCHBISHOP OF CANTERBURY. Instead of reminding 'Honourable' Members that theft is in clear breach of the eighth Commandment, Dr Williams sympathises with them and demands an end to the 'SYSTEMATIC HUMILIATION' of mainstream politicians, which he fears could undermine democracy and play into the hands of unpleasant fringe parties like the BNP.

This intervention is completely out of kilter with the public mood and shows once again how woefully out of touch the Archbishop is with his flock. The electorate will not be satisfied until all MPs who have fleeced the taxpayer have been exposed and purged. And that, Archbishop, can only be achieved with full disclosure - however painful in the short term.

They received £1.9million in petrol money alone in 2007-08, as well as £2.2million on train tickets and nearly £900,000 on air fares. On top of this they claimed nearly £500,000 of public money for spouses and children's travel. In total, the taxpayer stumped up an 'astronomical' £6.2million last year for MPs' travel. THIS IS ANOTHER EXAMPLE OF THE 'NO QUESTIONS ASKED' CULTURE SURROUNDING PARLIAMENTARY EXPENSES. MPs are taken at their word and required to provide little or no proof of the mileage covered.

In another development, it emerged last night that Chancellor Alistair Darling was one of nine cabinet members to claim on expenses the cost of accountants' advice in completing their personal tax returns. In one of the most startling cases, Labour MP Rudi Vis received £5,292 for driving about 15,000 miles even though his Finchley and Golders Green constituency is just nine miles north of Westminster.

The revelations come with MPs already facing the rage of voters after details of their housing and office allowances were exposed. Douglas Hogg billed the taxpayer to clean the moat at his country mansion, while Sir Peter Viggers claimed £2,000 for an ornamental duck house. Others claimed for the upkeep of swimming pools and tennis courts.

MINISTERS AND OFFICIALS HAVE KNOWN SINCE AT LEAST 2005 THAT MANY HOMES WERE IN THE WRONG TAX BANDS. But instead of solving the problem, they tried to keep it secret because coming clean would have embarrassed the Government and reduced its tax take from homeowners.

The cover-up was exposed after ministers were forced to reveal the minutes of a Whitehall meeting in 2005. The papers were handed to the House of Commons library with some sections blacked out. But a blunder by officials left the text still legible beneath the blacking. Whitehall's council tax inspectors have already been forced to correct the council tax bands of a quarter of a million homes across England and Wales following appeals by householders since the last general election. But hundreds of thousands of others still have no idea that they are being ripped off.

Tory spokesman Caroline Spelman said: 'The Government has been caught red-handed fiddling council tax to make families pay more. THE WHOLE MORAL BASIS OF OUR TAX SYSTEM IS UNDERMINED IF THE STATE CONSPIRES TO OVERCHARGE THE PUBLIC.' Local Government minister John Healey has admitted that ministers were aware of the cover-up as part of 'ongoing feedback from staff'.

Matthew Elliott, of the Taxpayers' Alliance, called for the Government to pay back the money - with interest. He said: 'With the Government's fiscal position looking so dire, they are trying to grab every last penny from taxpayers to stop the UK's debt rising even higher. But this is no excuse for them to effectively allow council tax to be overcharged on households who are already suffering financial pain. The Government's actions are completely underhand.'

But they said it would be "tragic" if people chose not to vote, or to register a protest vote, at the European Parliamentary and local elections on June 4. Dr Williams and Dr Sentamu said the forthcoming elections were taking place "at a time of extraordinary turbulence in our democratic system". They added: "The temptation to stay away or register a protest vote in order to send a negative signal to the parties represented at Westminster will be strong."

"In our view, however, it would be tragic if the understandable sense of anger and disillusionment with some MPs over recent revelations led voters to shun the ballot box." The Archbishops said some parties would exploit the current political situation if elected and said the BNP fostered "fear and division within communities, especially between people of different faiths or racial background".

They went on: "This is not a moment for voting in favour of any political party whose core ideology is about sowing division in our communities and hostility on grounds of race, creed or colour. It is an opportunity for renewing the vision of a community united by mutual respect, high ethical standards and the pursuit of justice and peace."

He was dismissed after a disciplinary hearing. The Christian Legal Centre said it is considering legal action. Mr Rao said that in the training exercise the woman had been playing the part of a patient with a life-threatening heart condition. He said he told her she should go to church to alleviate stress.

Christian Legal Centre (CLC) director Andrea Minichiello Williams said the centre was now representing Mr Rao and was considering legal action against his former employer. She said: "How is it possible that a nurse who has served the public for 40 years should find himself dismissed because in a training exercise he advised someone to go to church?"

"TO SEEK TO CENSOR AND SUPPRESS THIS KIND OF LANGUAGE AND BELIEF IS THE FRUITS OF A CLOSED SOCIETY."

Just hours later, North Korea appeared to have test-fired a short-range missile, South Korea's Yonhap news agency reported. Pyongyang has so far not commented on Yonhap's report. Following the announcement of North Korea's latest nuclear test on Monday, Japanese Foreign Ministry spokesman Kazuo Kodama said Tokyo would respond "in a responsible fashion" at the UN, without giving further details.

Russia's UN ambassador said an emergency meeting of the Security Council would be held later on Monday. The military in South Korea formed a crisis team and went into emergency talks. In Washington, a state department spokesman said officials were checking the report, "but we're not able to confirm at this time". The European Union said that the development was "very worrying".

On Monday, KCNA said North Korea's test had been "aimed at strengthening its self-defence nuclear deterrent in every way. The current nuclear test was safely conducted on a new higher level in terms of its explosive power and technology of its control." It said the results resolved "scientific and technological problems arising in further increasing the power of nuclear weapons and steadily developing nuclear technology".

South Korean officials said earlier that a seismic tremor was detected in the north-eastern part around the town of Kilju - the site of North Korea's first nuclear test. Both South Korea's and the US geological agencies said the tremor on Monday (25th May) morning indicated a nuclear explosion. The US Geological Survey said the 4.7-magnitude quake was detected at 0054 GMT.

Last month, Pyongyang pulled out of six-party talks on its nuclear programme, in protest against international condemnation of its test-firing of a rocket on 5 April.
The UN Security Council adopted a statement calling on North Korea to comply with a 2006 resolution banning missile tests. Pyongyang says its rocket carried a satellite, but several nations viewed it as cover for a missile test.

Minicows are not genetically engineered to be tiny, and they're not dwarfs. THEY ARE DRAWN FROM ORIGINAL BREEDS BROUGHT TO THE U.S. FROM EUROPE IN THE 1800s that were smaller than today's bovine giants, said Ron Lemenager, professor of animal science at Purdue University in West Lafayette, Indiana.

The Petersens' mini Herefords, with their white faces and rounded auburn-hued bodies, weigh in at a dainty 500 to 700 pounds, compared with 1,300 pounds or more for their heftier brethren. Big cows emerged as a product of the 1950s and '60s, when farmers were focused on getting more meat and didn't fret as much about the efficient use of animal feed or grasslands.

Their miniature Herefords consume about half that of a full-sized cow yet produce 50% to 75% of the rib-eyes and fillets, according to researchers and budget-conscious farmers. "We get more sirloin and less soup bone," Ali said. "People used to look at them and laugh. Now, they want to own them."

"Feed prices were relatively cheap, and grazing lands were accessible," Lemenager said. "The plan was to get more meat per animal. But it went way too far. The animals got too big and eat so much." Today, there's little room for inefficiency on a modern farm, and that has led some farmers to consider minicows.

"We do not intend to build any new settlements, but it wouldn't be fair to ban construction to meet the needs of natural growth or for there to be an outright construction ban," Netanyahu told his cabinet, according to officials.

The note of defiance came less than a week after Netanyahu held talks in Washington with Obama, who wants Israel to halt all settlement activity, including natural growth, as called for under a long-stalled peace "road map". Netanyahu's comments reaffirmed a position he took in his bid for the premiership in a February election. By natural growth, Israel refers to construction within the boundaries of existing settlements to accommodate growing families.

Thought we were on the long road to recovery; that economies and financial systems were now back in rude health; that interest rate cuts and quantitative easing were likely to push us out of recession and generate another boom? Not so fast.

When the ministers and central bankers from the world's richest nations met last month in Washington there was little room for back-slapping. Sure, they had seen their economies through the worst of the financial crisis. Most banks had been rescued from full-scale implosion. Governments had taken drastic measures to shore up their capital and ensure their survival. BUT THE MOUNTAIN OF DEBT THAT HAD POISONED THE FINANCIAL SYSTEM HAD NOT DISAPPEARED OVERNIGHT. INSTEAD, IT HAS BEEN SHIFTED FROM THE PRIVATE SECTOR ONTO THE PUBLIC SECTOR BALANCE SHEET.

Britain has taken on hundreds of billions of pounds of bank debt and stands behind potentially trillions of dollars of contingent liabilities. If the first stage of the crisis was the financial implosion and the second the economic crunch, the third stage – the one heralded by Johnson – is where GOVERNMENTS START TO TOPPLE under the weight of this debt. IF 2008 WAS A YEAR OF PRIVATE SECTOR BANKRUPTCIES, 2009 AND 2010, IT GOES, WILL BE THE YEARS OF GOVERNMENT INSOLVENCY.

The decision, which would make it hard for Americans in London to open bank accounts and trade shares, is being discussed by executives at Britain's banks and brokers who say it could become too expensive to service American clients. The proposals, which were unveiled as part of the president's first budget, are designed to clamp-down on American tax evaders abroad. However bank bosses say they are being asked to take on the task of collecting American taxes at a cost and legal liability that are inexpedient.

Andy Thompson of Association of Private Client Investment Managers and Stockbrokers (APCIMS) said: "The cost and administration of the US tax regime is causing UK investment firms to consider disinvesting in US shares on behalf of their clients. This is not right and emphasises that the administration of a tax regime on a global scale without any flexibility damages the very economy it is trying to protect."

One executive at a top UK bank who didn't want to be named for fear of angering the IRS said: "It's just about manageable under the current system - and that's because we're big. The danger to us is suddenly being hauled over the coals by the IRS for a client that hasn't paid proper taxes. The audit costs will soar. We'll have to pay it but I know plenty of smaller players won't."

Police forces across England, Wales and Scotland will soon be able to share the information on one central computer. Officers say it is a useful tool in fighting crime, but critics say the network is secretive and unregulated. Kent's Chief Constable, Michael Fuller, commented: "We've seen an increase of some 40% of arrests since we've been using this technology. I'm very confident that we're using it properly and responsibly, and that innocent people have nothing to fear from the way we use it."

But not everyone thinks it is such a good thing. John Catt found himself on the wrong side of the ANPR system. He regularly attends anti-war demonstrations outside a factory in Brighton, his home town. It was at one of these protests that Sussex police put a "marker" on his car. That meant he was added to a "hotlist".

This is a system meant for criminals but John Catt has not been convicted of anything and on a trip to London, the pensioner found himself pulled over by an anti-terror unit. "I WAS THREATENED UNDER THE TERRORIST ACT. I HAD TO ANSWER EVERY QUESTION THEY PUT TO ME, AND IF THERE WERE ANY QUESTIONS I WOULD REFUSE TO ANSWER, I WOULD BE ARRESTED. I THOUGHT TO MYSELF, WHAT KIND OF WORLD ARE WE LIVING IN?" Sussex police would not talk about the case.