A gut-wrenching slide on global financial markets this week once again exposed centuries-old divisions between European and U.S. philosophies when it comes to coping with economic crises. European officials have taken a more patient approach so far, resisting mounting pressure to follow the U.S. Federal Reserve's aggressive lead in trying to revive the sagging economy.

In part, it reflects different economic realities of the two regions. But it also points to strong cultural differences: In the United States, there is a sense of limitless economic possibilities. In Europe, there is a stronger belief in the recurring cycle of bigger events outside anyone's control. "Americans tend to be more optimistic - everybody's got the American dream," said Jeffrey Frankel, a professor at Harvard University's Kennedy School of Government. "Europeans are more fatalistic."

While the U.S. Fed made the biggest rate cut on record, the European Central Bank stood pat. As the tighter credit conditions curbed spending in both regions, the Fed responded with an emergency interest rate cut on Tuesday, its deepest in more than two decades. The ECB still insists that euro zone growth will remain near potential, and inflation poses the greatest risk to the economy. Fed critics contend that the U.S. central bank is blissfully ignoring THE RISK THAT ITS RATE CUTS WILL REWARD WALL STREET FOR LAX LENDING, AND INEVITABLY INFLATE ANOTHER ASSET BUBBLE THAT WILL SOME DAY BURST.

Hundreds of Egyptian security personnel have moved into the area but are so far making no attempt to stem the traffic. Thousands of people streamed across the border on Wednesday to buy food and supplies after militants destroyed long stretches of the border fence. In recent days Israel had tightened its blockade on Gaza, which is run by the Islamist Hamas movement.

On Wednesday, Israeli Prime Minister Ehud Olmert said he would not let the blockade turn into a humanitarian crisis. But he said he could not allow Gazans to live normal lives while people in southern Israel were under rocket fire. Israel closed most crossing points into Gaza in June after Hamas seized control. Israel tightened the measures last week, complaining about rockets being fired from Gaza into Israeli territory.

On Wednesday, at least 50,000 Gazans packed into cars and donkey carts or crossed the Egyptian border to buy supplies, seek medical attention, or to meet family members. The BBC's Tim Franks, reporting from the region, says that within hours of the border being blasted open, the price of cigarettes had halved. Correspondents say the big question now is what happens next.

All three stock market indexes erased deep losses to end strongly ahead. The Dow Jones rose 2.5% at 12,270.17, while the Nasdaq turned around a 4% decline. The rally followed news of a plan to bail out bond insurers, which lie at the heart of the financial system. They guarantee about $2 trillion of assets. Earlier, European stocks fell. The UK's FTSE 100 was down by 3.9% at one point. Panic has swept through stock markets worldwide on fears that key global economies will enter recession.

Despite slowing economic growth on both sides of the Atlantic, the Bank of England and the European Central Bank have insisted on the need to fight inflation, making extensive rate cuts unlikely. Bank of England governor Mervyn King said that the UK faced its toughest economic challenges since 1997, when the Bank gained independence from the government. European Central Bank (ECB) President Jean-Claude Trichet told the European Parliament in a speech on Wednesday that price growth was still the ECB's main concern.

"In all circumstances, but even more particularly in demanding times of significant market correction and turbulences, it is the responsibility of the central bank to solidly anchor inflation expectations to avoid additional volatility in already highly volatile markets," he explained.

"Bank of China failed to make a statement on an important event," the Shanghai stock exchange said. According to media reports, the Bank of China may post a loss for 2007 because of its exposure to the US sub-prime mortgage sector. Meanwhile, the Shanghai Composite index followed the global trend on Tuesday and fell 7.2%, after dropping 5% on Monday, while Hong Kong shares experienced a record one-day fall of 8.7%.

Zhang Gang, an analyst at Southwest Securities, said that investors were "worried that the US credit crisis may spread into other countries. Financial stocks were hit the most, with the sentiment dampened on the expectation of a loss in the Bank of China annual report," said Shen Jun at Bank of China International.

Japan's benchmark Nikkei index closed 2.1% higher, while key share indexes climbed by more than 2% in Mumbai, Hong Kong and Sydney. The rebound came on hopes of a rescue plan for US bond insurers that could prevent a new wave of asset writedowns. The hopes had led US share prices to close higher on Wednesday, reversing falls seen earlier in the day

So far this year, the FTSE 100 has lost more than 13% of its value, wiping about £225bn off the total value of the companies listed on the index. Germany Dax's index has been one of the worst hit in Europe, down almost 20% this year.

The Amazon has long been known as the "lungs of the world". In the last five months of 2007, 3,000 sq km (1,250 sq miles) were lost. Gilberto Camara, whose National Institute of Space Research provides satellite imaging of the Amazon, said the figure was unprecedented. "We've never before detected such a high deforestation rate at this time of year," he said. His concern, outlined during a press conference in Brasilia on Wednesday, was echoed by Environment Minister Marina Silva.

The rise in deforestation will be an embarrassment for the Brazilian president, who last year said his government's efforts to control illegal logging and introduce better certification of land ownership had helped reduce forest clearance significantly. Even as he celebrated the success, though, environmentalists were warning that the rate was rising again. The situation may also be worse than reported, with the environment ministry saying the preliminary assessment of the amount of forest cleared could double as more detailed satellite images are analysed.

The nonpartisan CBO says that once the cost of wars is added to its "baseline" deficit estimate of $219 billion, the deficit would be about $250 billion. "After three years of declining budget deficits, a slowing economy this year will contribute to an increase in the deficit," the CBO report said.

Such a figure greatly exceeds the $163 billion in red ink registered last year. Including likely but still unapproved outlays for the wars in Iraq and Afghanistan, the deficit for 2008 would total about $250 billion, CBO said. Senate Budget Committee Chairman Kent Conrad, D-N.D., said the 2008 deficit would reach more than $350 billion once the costs of an upcoming economic stimulus measure under negotiation between the Bush administration and Congress are factored in.

Utility officials say such shutdowns probably wouldn't result in blackouts. But they could lead to shockingly higher electric bills for millions of Southerners, because the region's utilities may be forced to buy expensive replacement power from other energy companies. Already, there has been one brief, drought-related shutdown, at a reactor in Alabama over the summer.

"Water is the nuclear industry's Achilles' heel," said Jim Warren, executive director of N.C. Waste Awareness and Reduction Network, an environmental group critical of nuclear power. "You need a lot of water to operate nuclear plants." He added: "This is becoming a crisis." An Associated Press analysis of the nation's 104 nuclear reactors found that 24 are in areas experiencing the most severe levels of drought. All but two are built on the shores of lakes and rivers and rely on submerged intake pipes to draw billions of gallons of water for use in cooling and condensing steam after it has turned the plants' turbines.

Because of the yearlong dry spell gripping the region, the water levels on those lakes and rivers are getting close to the minimums set by the Nuclear Regulatory Commission. Over the next several months, the water could drop below the intake pipes altogether. Or the shallow water could become too hot under the sun to use as coolant. The water was low on the Tennessee River and had become warmer than usual under the hot sun. By the time it had been pumped through the Browns Ferry plant, it had become hotter still -- too hot to release back into the river, according to the TVA. So the utility shut down a reactor.

David Lochbaum, nuclear project safety director for the Union of Concerned Scientists, warned that nuclear plants are not designed to take the wear and tear of repeatedly stopping and restarting.

The global economic situation looks increasingly bad as we face a certain global depression primarily due to the INSANE MONETARY POLICIES OF THE CENTRAL BANKERS. SOME OF THE BIG BANKS ARE REPORTING LOSSES GREATER THAN THE ASSETS THEY HAVE ON THE BOOKS. FOREIGNERS ARE ALSO COMING IN AND ARE BUYING UP THIS NATION'S INFRASTRUCTURE. It is a complete disaster.

Amazingly, the Federal Reserve is indicating that they are LIKELY TO REDUCE INTEREST RATES AGAIN WHICH WILL CAUSE FURTHER VALUE DESTRUCTION OF THE U.S. DOLLAR. This combined with Bush's so called economic stimulus package are phony solutions that will do nothing to stave off the coming economic calamity. In fact, the Federal Reserve is doing the exact opposite of what they should be doing if they sought a long term solution. A LONG TERM SOLUTION WOULD INVOLVE STRENGTHENING THE U.S. DOLLAR WITH A SOUND MONETARY POLICY. By devaluing the U.S. Dollar they are robbing the average American blind and most don't even realize it.

Much like the Great Depression, the international bankers are now preparing to consolidate more wealth through these irrational policies as an excuse to bring in regional currencies and regional governmental bodies. As a result, we remain bullish on gold, silver and other sound financial instruments in light of this economic tyranny. EXPECT SHORT TERM VOLATILITY BUT IN THE LONG TERM EXPECT GOLD, SILVER AND COMMODITIES TO RISE IN U.S. DOLLAR DENOMINATIONS.

The U.S. Dollar as the world's reserve currency has now been called an experiment and a historical anomaly by the Council on Foreign Relations. This is an accurate assessment as never before in the history of man HAVE WE HAD A RESERVE CURRENCY ON A GLOBAL SCALE WITH NO BACKING. A hundred years ago, it was inconceivable that a monetary system could exist without gold or silver, now many economists can't conceive of a monetary system with gold and silver. IT IS LITERAL MADNESS!

Rising fuel and food prices could push inflation above the 3 per cent level at which King would be forced to write to the Chancellor to explain. King said he feared he might have to "write more than one". However, he gave his strongest indication yet that interest rates would be cut when the Monetary Policy Committee next meets in February, saying the current rate of 5.5 per cent was "probably bearing down demand".

"The situation is much more serious than any other financial crisis since the end of World War II," Soros was quoted as saying. He said over the past few years politics had been guided by some basic misunderstandings stemming from something that he called "market fundamentalism" - the belief that financial markets tended to act as a balance. "This is the wrong idea," he said. "We really do have a serious financial crisis now."

He added he was surprised how little it was understood that a US recession was also a threat to Europe. European shares duly fell nearly six per cent on Monday, their biggest one-day slide since 9/11.

While many worry about the potential consequences of atmospheric warming, a few experts are trying to call attention to another global crisis quietly taking place under our feet. Call it the thin brown line. Dirt. On average, the planet is covered with little more than 3 feet of topsoil -- the shallow skin of nutrient-rich matter that sustains most of our food and appears to play a critical role in supporting life on Earth. "We're losing more and more of it every day," said David Montgomery, a geologist at the University of Washington. "The estimate is that we are now losing about 1 percent of our topsoil every year to erosion, most of this caused by agriculture."

Montgomery has written a popular book, "Dirt," to call public attention to what he believes is a neglected environmental catastrophe. A geomorphologist who studies how landscapes form, Montgomery describes modern agricultural practices as "soil mining" to emphasize that we are rapidly outstripping the Earth's natural rate of restoring topsoil. "Globally, it's clear we are eroding soils at a rate much faster than they can form," said John Reganold, a soils scientist at Washington State University. "It's hard to get people to pay much attention to this because, frankly, most of us take soil for granted."

The National Academy of Sciences has determined that cropland in the U.S. is being eroded at least 10 times faster than the time it takes for lost soil to be replaced. The United Nations has warned of worldwide soil degradation -- especially in sub-Saharan Africa, where soil loss has contributed to the rapidly increasing number of malnourished people. Healthy topsoil is a biological matrix, a housing complex for an incredibly diverse community of organisms -- billions of beneficial microbes per handful, nitrogen-fixing fungi, nutrients and earthworms whose digestive tracts transform the fine grains of sterile rock and plant detritus into the fertile excrement that gave rise to the word itself ("drit," in Old Norse).

As such, true living topsoil cannot be made overnight, Montgomery emphasized. Topsoil grows back at a rate of an inch or two over hundreds of years. Very slowly. "Globally, it's pretty clear we're running out of dirt," Montgomery said. Organic farming methods also can reduce soil loss, he said. He cited his own research, which has shown a marked increase in soil health, water retention and regrowth when organic methods are used rather than the traditional methods.

The speaker of Iran's Parliament appealed to Ayatollah Khameini after the president refused to implement a law aimed at assisting rural Iranians through one of the coldest winters the country has had in several years, the BBC reported Tuesday. A letter giving Khameini's order was read in Parliament. Cold weather and severe snowstorms have caused at least 64 deaths in Iran. In much of the country, gas supplies have run low, leading to cuts in pressure, and some places have no gas at all.

Ahmadinejad has come under fire for failing to respond to the crisis. The British network also reported many Iranians feel more free to criticize the president given the apparent reduced threat of a military strike by the United States or Israel.

The study concluded that the statements "were part of an orchestrated campaign that effectively galvanized public opinion and, in the process, led the nation to war under decidedly false pretenses." The study was posted Tuesday on the Web site of the Center for Public Integrity, which worked with the Fund for Independence in Journalism. White House spokesman Scott Stanzel did not comment on the merits of the study Tuesday night but reiterated the administration's position that the world community viewed Iraq's leader, Saddam Hussein, as a threat.

"The actions taken in 2003 were based on the collective judgment of intelligence agencies around the world," Stanzel said. The study counted 935 false statements in the two-year period. It found that in speeches, briefings, interviews and other venues, Bush and administration officials stated unequivocally on at least 532 occasions that Iraq had weapons of mass destruction or was trying to produce or obtain them or had links to al-Qaida or both.

"It is now beyond dispute that Iraq did not possess any weapons of mass destruction or have meaningful ties to al-Qaida," according to Charles Lewis and Mark Reading-Smith of the Fund for Independence in Journalism staff members, writing an overview of the study. "IN SHORT, THE BUSH ADMINISTRATION LED THE NATION TO WAR ON THE BASIS OF ERRONEOUS INFORMATION THAT IT METHODICALLY PROPAGATED AND THAT CULMINATED IN MILITARY ACTION AGAINST IRAQ ON MARCH 19, 2003."

The 69-year old African statesman faces a tough challenge resolving a bitter standoff between Kenyan President Mwai Kibaki and opposition challenger Raila Odinga over a disputed poll that plunged Kenya into chaos and ethnic bloodshed. "We are determined to work with the parties to find a solution as quickly as possible," Annan told reporters after landing in Nairobi late on Tuesday.

"We want to determine by tomorrow how quickly the parties want to work with us," he said, flanked by fellow mediators Benjamin Mkapa, the former president of Tanzania, and Graca Machel, the wife of former South African leader Nelson Mandela. Clashes between Kibaki and Odinga supporters, ethnic unrest and a brutal crackdown by the security forces have killed at least 650 people over the past month.

Odinga says a December 27 poll that returned Kibaki to power was fraudulent. His supporters have taken to the streets and mobs mostly targeting Kibaki's Kikuyu tribe have hacked people to death and burnt homes. There have also been reprisal killings.