The level of the dollar - often regarded as a barometer of the U.S. economy's health - dropped to $1.4120 against the euro during business hours in Asia, reaching an all-time low for a second consecutive day.

      It also slipped against a number of other major currencies on speculation that the U.S. Federal Reserve would keep cutting interest rates as the world's largest economy weakens.

      Sentiment soured for the dollar after Ben Bernanke, chairman of the Federal Reserve, stoked speculation that he might continue to lower rates following this week's aggressive trim of half a percentage point. Bernanke said Thursday that the sell-off in credit markets could make the housing recession more severe.

      The dollar recovered somewhat during European trading, but investors believe that the currency will continue to lose ground, as it has for much of the past six years.

      "The dollar weakness will drag on," said Simon Derrick, chief currency strategist at Bank of New York Mellon in London. "The crisis is not over and the Fed is likely to cut rates further."

      Officials across the globe, including the U.S. Treasury secretary, Henry Paulson Jr., have also been warning that it will take some time for the dust to clear from the fallout of the tanking U.S. real estate market.

      "The crisis isn't over," Peter Costello, the Australian treasurer, said Friday. "It still has some way to go."

      Banks as far away from the United States as Australia have taken a hit from the drying up of easy money that they need to do business.

      This week, depositors made a run on Northern Rock to withdraw their savings after the British bank revealed it was at risk of failing and needed a bailout from the Bank of England.

      The drama highlighted the severity of the shock waves stemming from rising defaults in U.S. subprime home mortgages: Northern Rock was not exposed to the subprime market but it did get tangled up in the ensuing credit crunch.

      Among other superlatives that have gripped financial markets this week, the price of oil rose to a record of just under $84 a barrel. The price could further threaten already slowing global growth.

      Gold also hit a 28-year high Friday as the dollar's slide prompted speculative investors to seek a safe haven.

      The week also exposed some of the beneficiaries of the market turmoil.

      On Thursday, in a series of multibillion dollar deals, Dubai, Qatar and Abu Dhabi reached out to acquire significant stakes in three stock markets and a U.S. private equity firm, illustrating an increasing appetite for investing their growing wealth in high-quality assets abroad as oil prices hit records.

      Volatility in the markets is stirring debate among policy makers.

      President Nicolas Sarkozy of France pressed Jean-Claude Trichet, president of the European Central Bank, to lower interest rates.

      "When the U.S. central bank lowers its rates, everything picks up; when we don't lower ours, we go down," Sarkozy said Thursday in an interview with the television stations TF1 and France 2. "I'm telling Mr. Trichet, 'Look at what others are doing.' "

      Pressure is also growing on China, which European and U.S. officials say is keeping the yuan at an artificially low level to keep its exports strong.

      Finance Minister Christine Lagarde of France said Friday in Beijing that she was concerned about the impact not only of the euro-dollar rate but also the euro's rate against the Chinese yuan and the Japanese yen.

      She said she had raised the issue of unbalanced exchange rates both with Finance Minister Xie Xuren and Premier Wen Jiabao of China.

      She said there was a need for all countries affected by currency imbalances to think about how to engineer greater stability in financial markets.

      The yuan has appreciated by a total of about 10 percent against the dollar since July 2005, when it was revalued and decoupled from a peg against the dollar to float in a managed range.

      But it has weakened against the euro by about 4.7 percent.

      Financial markets have also been spooked by comments by the former chairman of the Federal Reserve, Alan Greenspan, who gave numerous interviews this week to promote his book.

      Greenspan said the odds of a recession remain "somewhat more" than one in three even after this week's cut in U.S. interest rates..."

      The Bottom Line:  Further along the downward spiral we go.

      WASHINGTON (Reuters) - This week's surprisingly steep U.S. interest rate cut should have eased pressure on debt-laden Americans, but as record-high oil prices stoke inflation fears consumers may get the worst of both worlds.

      Betting against the mighty U.S. consumer is usually a mistake. Spending held up remarkably well in the face of oil price spikes in 2005 and 2006, and many analysts argue that Americans have grown accustomed to paying $3 per gallon of gasoline and won't be shocked into cutting back now.

      However, the spike that took oil above $80 per barrel this week comes as consumers are already contending with fallout from the slumping housing market and tighter credit conditions, as well as rising costs for a host of everyday items like bread, coffee and even beer.

      Sara Lee Corp raised bread prices by 5 percent this month, and warned it may have to hike them again because of high wheat costs. Starbucks Corp raised prices by an average of 9 cents per cup of coffee this summer. Beer maker Anheuser-Busch plans to raise prices early next year.

      And while the Federal Reserve's one-half percentage point cut in the benchmark interest rate should lower the cost of carrying credit-card debt, the inflation worries have pushed up yields on the 10-year Treasury bond that most banks use to set mortgages, so home loan rates actually rose this week.

      "It's clear that the cut in itself is not going to help the consumer very much, but the signal that the Fed is so willing to step in here is probably comforting to everyone in the economy," said Torsten Slok, director of U.S. economics at Deutsche Bank in New York.

CALM BEFORE THE STORM

      North Pole (National Geographic) -- " Rock samples retrieved last month from beneath the Arctic Ocean indicate that the North Pole is part of Mother Russia, the Russian government announced yesterday. The Russians contend that the Lomonosov Ridge, an undersea structure running across the Arctic Ocean beneath the pole, is a geological extension of the Russian region of Siberia.

      Under international law, Russia could lay claim to the potentially oil-rich seabed under the Arctic ice if it can prove that the ridge is part of the country's continental shelf.

      In a statement released yesterday, Russia's Ministry of Natural Resources said that a preliminary analysis "confirms the fact that the structure of the Lomonosov Ridge crust matches world analogs of continental crust."

      In other words, the rock is of a type found on continental shelves rather than in normal mid-ocean seabeds..."

       United Kingdom (BBC) -- "The US dollar hit a new record low against the euro as investors sold the currency after the Federal Reserve's hefty interest rate cut.

       The greenback dropped below the psychologically-key $1.40 level against the euro, deepening recent losses.

       Meanwhile, the Canadian dollar reached one-to-one parity with the US currency for the first time in 31 years.

       A strong domestic economy and concerns about a US economic slowdown have led to the rally on Canada's Loonie.

Dampen costs

       The euro reached as much as $1.4099 in Thursday trading, its highest level since the single European currency was launched.

       Hints of rate rises from the European Central Bank and stronger European growth have also boosted the euro's value.

       Analysts have said that the impact of the plunging dollar on European consumer and businesses may be mixed.

       Eurozone consumers may benefit from cheaper prices for some imported goods, while input costs for eurozone firms may fall as oil, metals and many raw material prices are quoted in dollars.

       However, while the strong euro may cut some import costs, it could also have a negative effect on exports as European-made goods become more expensive.

       The US is Europe's largest trading partner.

       It could also hurt growth in Asia, with the US being the largest market for China, Korea, and other Asian exporters.

Dollar problems

       The dollar has been weakening for some time.

       The fundamental problem is the growing US trade deficit - now more than $700bn - as the US economy has imported far more goods than it has exported.

       This has long been seen as unsustainable, and in the long-run some kind of currency adjustment has been seen as both inevitable and desirable.

       But the US central bank's recent change in policy has accelerated the decline, because people who put their money in dollars no longer get such a high rate of return.

       The Fed cut rates in order to stem problems in the US housing market, caused by an increase in the number of people defaulting on loans, which could cause an economic slowdown across the board.

      The Bottom Line:  The economic nightmare of bad news is coming harder and faster now; I'm having a hard time keeping up.

      NEW YORK (Reuters) - "Oil surged over $83 a barrel on Thursday in the seventh straight record-breaking session as companies shut Gulf of Mexico output on forecasts a tropical depression churning through the region would become a storm.

      U.S. crude gained $1.44 to $83.37 a barrel at 2:17 p.m. after hitting an all-time high of $83.60 earlier. London Brent rose 40 cents to $78.87.

      Oil has traded above $80 for the past week in part due to concerns about U.S. supplies after government data showed crude stocks in the top consumer fell for the fourth consecutive week.

      A tropical depression blowing into the Gulf of Mexico exacerbated worries as companies shut offshore oil and natural gas output on expectations it would become a tropical storm.

      Energy companies have shut over 360,100 barrels of oil per day, some 27.7 percent, of Gulf crude oil production and 16.7 percent of natural gas production on the storm threat, the U.S. Minerals Management Service said on Thursday.

      "Energy companies shutting down Gulf of Mexico production and Fed Chief Bernanke's optimistic words on the economy were supportive for this latest record rise in crude futures," said Phil Flynn, analyst at Alaron Trading in Chicago.

RISING PRICES

      BAGHDAD, Iraq (CNN) -- "Coalition forces on Thursday arrested a suspected member of an elite Iranian unit that has been accused of training and equipping insurgents in Iraq, the U.S. military said.

      The military said the suspect, who was not identified, is a member of Iran's Islamic Revolutionary Guard Corps - Quds Force.

      The U.S. military calls the force "a covert action arm of the Iranian government responsible for aiding lethal attacks against the Iraqi government and coalition forces."

      The military said the Quds Force suspect was involved in bringing roadside bombs from Iran into Iraq and in training foreign terrorists in Iraq.

      The man, captured in the Iraqi Kurdish city of Sulaimaniya, is one of several Iranians in U.S. custody in Iraq.

      Also on Thursday, an Iraqi National Police intelligence officer was taken into custody for "suspected involvement in illegal militia activities," the U.S. military said.

      Col. Thamir Mohammad Sinah al-Husayni, also known as Abu Turab, was arrested by U.S. troops.

      The officer used his position "to direct Iraqi National Police officers to use traffic checkpoints throughout western Baghdad to detain Sunnis, thereby aiding in sectarian evictions in Shia areas," the military said.

      The military also said he abused Sunni detainees and used them to obtain ransom.

      Meanwhile, two Iraqi soldiers were among three people killed Thursday when a parked car detonated near an Iraqi Army checkpoint, an Interior Ministry official said.

      The official said a tow-truck driver hauling a car approached the checkpoint and asked troops if he could drop off the vehicle he was towing near the checkpoint because he had to tow another car.

      The driver dropped the car off and left. Moments later, the parked car blew up, the Interior Ministry official said

      The bomb exploded in the Habibiya neighborhood at the edge of Sadr City, the densely populated Shiite slum in northeastern Baghdad. Seven people were wounded, including four soldiers.

      United Kingdom (Telegraph) -- "Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

      "This is a very dangerous situation for the dollar," said Hans Redeker, currency chief at BNP Paribas.

      "Saudi Arabia has $800bn (£400bn) in their future generation fund, and the entire region has $3,500bn under management. They face an inflationary threat and do not want to import an interest rate policy set for the recessionary conditions in the United States," he said.

      The Saudi central bank said today that it would take "appropriate measures" to halt huge capital inflows into the country, but analysts say this policy is unsustainable and will inevitably lead to the collapse of the dollar peg.

      As a close ally of the US, Riyadh has so far tried to stick to the peg, but the link is now destabilising its own economy.

      The Fed's dramatic half point cut to 4.75pc yesterday has already caused a plunge in the world dollar index to a fifteen year low, touching with weakest level ever against the mighty euro at just under $1.40.

      There is now a growing danger that global investors will start to shun the US bond markets. The latest US government data on foreign holdings released this week show a collapse in purchases of US bonds from $97bn to just $19bn in July, with outright net sales of US Treasuries.

      The danger is that this could now accelerate as the yield gap between the United States and the rest of the world narrows rapidly, leaving America starved of foreign capital flows needed to cover its current account deficit -- expected to reach $850bn this year, or 6.5pc of GDP.

      Mr Redeker said foreign investors have been gradually pulling out of the long-term US debt markets, leaving the dollar dependent on short-term funding. Foreigners have funded 25pc to 30pc of America's credit and short-term paper markets over the last two years.

      "They were willing to provide the money when rates were paying nicely, but why bear the risk in these dramatically changed circumstances? We think that a fall in dollar to $1.50 against the euro is not out of the question at all by the first quarter of 2008," he said.

      "This is nothing like the situation in 1998 when the crisis was in Asia, but the US was booming. This time the US itself is the problem," he said.

      Mr Redeker said the biggest danger for the dollar is that falling US rates will at some point trigger a reversal yen "carry trade", causing massive flows from the US back to Japan.

      Jim Rogers, the commodity king and former partner of George Soros, said the Federal Reserve was playing with fire by cutting rates so aggressively at a time when the dollar was already under pressure.

      The risk is that flight from US bonds could push up the long-term yields that form the base price of credit for most mortgages, the driving the property market into even deeper crisis.

      "If Ben Bernanke starts running those printing presses even faster than he's already doing, we are going to have a serious recession. The dollar's going to collapse, the bond market's going to collapse. There's going to be a lot of problems," he said.

      The Federal Reserve, however, clearly calculates the risk of a sudden downturn is now so great that the it outweighs dangers of a dollar slide.

      Former Fed chief Alan Greenspan said this week that house prices may fall by "double digits" as the subprime crisis bites harder, prompting households to cut back sharply on spending.

      For Saudi Arabia, the dollar peg has clearly become a liability. Inflation has risen to 4pc and the M3 broad money supply is surging at 22pc.

      The pressures are even worse in other parts of the Gulf. The United Arab Emirates now faces inflation of 9.3pc, a 20-year high. In Qatar it has reached 13pc.

      Kuwait became the first of the oil sheikhdoms to break its dollar peg in May, a move that has begun to rein in rampant money supply growth..."

      The Bottom Line:  The world has lost faith in the U.S. Dollar (Except for The U.S. and some dopey guys in the U.K.)  I wonder how long it will take for the greed-drunken bankers and day-traders to realize the party is over.  I really feel sorry for the guys stuck cleaning the place up.

      SINGAPORE (Reuters) - "Oil hovered just below $82 a barrel on Thursday after U.S. crude inventories fell more than expected and as the threat of a storm gathering near Florida reignited supply concerns in the world's top consumer.

      U.S. light crude for October delivery rose 2 cents to $81.95 a barrel by 11:21 p.m. EDT, after a record-high of $82.51 on Wednesday, the sixth consecutive session to hit a record. London Brent crude for November fell 27 cents to $78.20.

      Oil prices have rallied 18 percent in the past month and by a third this year, driven by worries of a possible supply crunch during the Northern Hemisphere winter, supply risks from Mexico to Iran and fund flows from poorly performing equity markets.

      "In the short term there are so many elements that are supporting prices," said Andrew Harrington, a commodities analyst at Australia and New Zealand Bank.

      "But unless there's a major disruption, we should see softer prices in the medium term, possibly in the high $60s," he added.

      Boosting supply concerns, more oil firms on Wednesday pulled nonessential staff from offshore platforms in the Gulf of Mexico due to the threat of a storm, but only a small amount of production has stopped so far.

      The U.S. National Hurricane Center said a tropical disturbance over Florida could strengthen into a tropical cyclone and cross into the Gulf of Mexico in the coming days, threatening a quarter of the nation's oil production.

      SHANNON, Ireland (CNN) -- "U.S. Secretary of State Condoleezza Rice cautioned the U.N. nuclear watchdog group Wednesday not to interfere with international diplomacy over Iran's alleged weapons program.

      The International Atomic Energy Agency "is not in the business of diplomacy," Rice told reporters traveling with her to the Middle East.

      The IAEA's role should be limited to carrying out inspections and offering a "clear declaration and clear reporting on what the Iranians are doing; whether and when and if they are living up to the agreements they have signed," she said.

      Rice was referring to recent comments made by IAEA chief Mohamed ElBaradei, in which he criticized U.S. rhetoric about Iran.

      ElBaradei has called for less emphasis on additional U.N. sanctions against Iran in favor of enhanced cooperation between the IAEA and Tehran. Iran has agreed with IAEA requests to answer unresolved questions about its nuclear program.

      Iranian officials insist their nuclear program is aimed at producing civilian electric power, but the Bush administration accuses Tehran of working toward a nuclear weapon. President Bush has called the prospect of a nuclear-armed Iran "unacceptable."

      Rice said the IAEA agreement with Iran was "a good thing," but "this wouldn't be the first time the Iranians made an agreement only to break it"

      She said the U.N. Security Council is working on a third resolution imposing additional sanctions against Iran for failing to suspend its uranium enrichment program..."

      New York (Bloomberg) -- "The dollar may extend a decline against the euro after the Federal Reserve cut its benchmark interest rate for the first time in four years, dimming the allure of the U.S. currency.

      Traders drove the dollar to a record low against the euro yesterday after the Fed cut its target rate for overnight loans between banks by a half-percentage point to 4.75 percent amid concern that the worst housing slump in 16 years may threaten economic growth. Reports today are forecast to show housing starts dropped last month while a gauge of inflation slowed.

      ``Growth and interest-rate differentials are both turning against the dollar,'' said Samarjit Shankar, director of global strategy for the Global Markets group in Boston at Bank of New York Mellon. ``This confirms the dollar bears' view. We are easily running toward $1.4 now. Probably within a week.''

      The dollar traded at $1.3987 per euro at 5:51 a.m. in Tokyo. The U.S. currency lost 0.9 percent yesterday and touched a record low of $1.3988. The U.S. currency also set a 30-year low of 98.80 U.S. cents per Canadian dollar yesterday.

      The dollar has lost 5.5 percent this year versus the euro as traders bet the Fed would cut rates as the U.S. economy slowed. The European Central Bank's benchmark rate is 4 percent.

      The New York Board of Trade's Dollar Index comparing the U.S. currency against six primary peers, including the euro and yen, touched 79.157 yesterday, the lowest since September 1992.

BOJ Meeting

      The yen may extend its losses against the dollar and euro before the Bank of Japan releases its decision on interest rates today. The central bank is forecast by economists in a Bloomberg News poll to keep its benchmark rate at 0.5 percent, the lowest among industrialized nations.

      The Japanese currency dropped against all 16 major currencies yesterday after the Fed rate cut fueled a rally in U.S. stocks, spurring investors to buy riskier assets funded by borrowed yen.

      The yen traded at 116.10 per dollar and 162.36 per euro. The Japanese currency dropped 0.9 percent against the dollar and 1.7 percent versus the euro yesterday.

      ``Developments in financial markets since the Committee's last regular meeting have increased the uncertainty surrounding the economic outlook,'' the Federal Open Market Committee said yesterday in a statement. The FOMC ``will act as needed to foster price stability and sustainable economic growth.''

4.75 Percent Forecast

      The median forecast in a Bloomberg News survey of 134 analysts had been for a quarter-point Fed cut. Only 23 economists forecast the Fed would lower the rate to 4.75 percent, while six expected no change. The Fed had kept the benchmark overnight rate at 5.25 percent since June 2006.

      The Fed's Board of Governors also lowered the rate on direct loans to banks by half a percentage point yesterday to 5.25 percent.

      At 4.04 percent, two-year German bunds yielded about 0.07 percentage point more than comparable-maturity Treasuries, the widest difference since 2004. The U.S. notes yielded 0.08 percentage point more than German bunds two days ago.

      U.S. housing starts probably fell to an annualized rate of 1.35 million last month from 1.38 million a month earlier, while the consumer price index probably slowed to a 2.1 percent annual rate in August, from 2.4 percent in July, according to the median forecast in separate Bloomberg News surveys.

      ``It's about the Fed's easing cycle,'' said Adam Boyton, a senior currency strategist in New York at Deutsche Bank AG, before the Fed decision. ``The Fed will cut the rate more than once, which paints a bearish picture for the dollar.''

      The Bottom Line:  I think they have wheelburrows on sale at Home Depot.   You'll need one if you plan on paying cash for a gallon of milk.  Hyperinflation, here we come.  Lankmark failure of the Fed, and thus marks the death of the U.S. Dollar.

      SINGAPORE (Reuters) - "Oil climbed above $82 a barrel on Wednesday, near a record reached a day earlier after the U.S. Federal Reserve slashed interest rates to calm worries over economic growth ahead of peak winter fuel demand.

      U.S. light crude for October delivery rose 82 cents to $82.33 a barrel by 9:42 p.m. EDT, after gains of 94 cents on Tuesday, when prices hit a fresh record of $82.38. London Brent crude gained 72 cents to trade at $78.31 a barrel.

      The Federal Reserve chopped U.S. interest rates by a hefty half-percentage point on Tuesday in a bid to shield the economy from a housing slump and financial turbulence, sparking an equities and commodities rally and giving oil another boost.

      "Now the market is going to be searching for $85 a barrel," said Tony Nunan, risk management executive at Mitsubishi Corp in Tokyo.

      Oil prices, which have gained more than a third since the start of the year, have benefited from hurricane threats and other supply risks, fund flows into energy from poorly performing equity markets and falling U.S. inventories.

      U.S. crude oil supplies are forecast to have dropped for the fourth week in a row last week, down by 2 million barrels as imports shrank further, said industry analysts polled by Reuters ahead of government data later on Wednesday.

      "If we get a big drop in inventories, like three to seven million, then prices could get there in a hurry," Nunan added.

      WASHINGTON (Reuters) - "Spying on the United States by Russia and China has rebounded almost to Cold War levels, the top U.S. spy chief told Congress on Tuesday in seeking a permanent expansion of U.S. eavesdropping authority.

      National Intelligence Director Mike McConnell made the accusation as the White House stepped up lobbying a skeptical Democratic-led Congress for broadened surveillance powers, which are primarily cast as a counterterrorism tool.

      "China and Russia's foreign intelligence services are among the most aggressive in collecting against sensitive and protected U.S. systems, facilities and development projects," McConnell told the House of Representatives Judiciary Committee in written testimony.

      "Their efforts are approaching Cold War levels," he said.

      McConnell declined to elaborate after the hearing.

      His spokesman, Ross Feinstein, said the testimony was meant to emphasize that the eavesdropping authority under the 1978 Foreign Intelligence and Surveillance Act, or FISA, is needed for traditional counterintelligence as well as terrorism surveillance.

      "FISA is beyond a terrorist tool, we are talking about foreign intelligence as well," he said.

      BERLIN (Reuters) - "The euro could replace the U.S. dollar as the world's primary reserve currency, a German magazine quoted former Federal Reserve Chairman Alan Greenspan as saying on Monday.

      Greenspan told weekly Stern it was "absolutely conceivable that the euro will replace the dollar as reserve currency, or will be traded as an equally important reserve currency," the magazine said in a preview of this week's edition.

      The dollar no longer had much of a lead over the euro, he said, adding that the European Central Bank had "developed into a global economic force to be taken seriously."

      Greenspan, whose memoir "The Age of Turbulence: Adventures in a New World" hits bookshelves on Monday, said the euro region had profited from the strength of the European single currency.

      Its use as a reserve currency had led to a drop in euro-zone interest rates and "without doubt contributed to the current economic expansion," he added..."

      The Bottom Line:  See that dark cloud on the horizon? Tthat's going to be one hell'uva storm.

      SINGAPORE (Reuters) - "Oil surged to a record high above $81 a barrel on Tuesday, drawing strength from concerns of a winter supply squeeze in the world's top consumer where an anticipated interest rate cut is calming recession fears.

      U.S. light crude for October delivery rose 56 cents to $81.13 a barrel by 11:15 p.m. EDT after touching a high of $81.18 earlier in Tuesday's session and a $1.47 jump on Monday. London Brent crude for November rose 22 cents to $77.20 a barrel.

      "The market developed a momentum of its own when price movement coincided with tightness in the market," said David Moore, commodities strategist Australia's Commonwealth Bank.

      "In such a tight market there is potential for it to go up quite sharply without any major new news, but I actually expect some profit-taking at these levels to around $80," he added.

      The U.S. Federal Reserve looked set to trim rates by at least 25 basis points on Tuesday to keep a credit crunch from pulling the economy into a recession, which analysts have feared could hamper oil demand.

      Hurricane and other supply risks, together with falling U.S. inventories and fund flows into energy from poorly performing equity markets, have fuelled the recent hike in oil prices, which have climbed 33 percent this year..."

More:

Australia slashes wheat forecast in light of global shortage and record prices

      Pentagon planners have developed a list of up to 2,000 bombing targets in Iran, amid growing fears among serving officers that diplomatic efforts to slow Iran's nuclear weapons programme are doomed to fail.

      Pentagon and CIA officers say they believe that the White House has begun a carefully calibrated programme of escalation that could lead to a military showdown with Iran.

      Now it has emerged that Condoleezza Rice, the secretary of state, who has been pushing for a diplomatic solution, is prepared to settle her differences with Vice-President Dick Cheney and sanction military action.

More:

France warning of war with Iran

Vladimir Putin's global warning

Iran anger over French war warning

Intelligence Director Says Russia, China Spying on U.S.

       DES MOINES, Iowa (CNN) -- "Democratic presidential candidate Sen. Hillary Clinton announced a $110 billion health care reform plan Monday that would require all Americans to have health insurance.

      "Here in America people are dying because they couldn't get the care they needed when they were sick.

      "I'm here today because I believe it is long past time that this nation had an answer," Clinton said. "I believe America is ready for change.

      "It's time to provide quality affordable health care for every American," Clinton said. "And I intend to be the president who accomplishes that goal finally for our country."

      SYDNEY (Reuters) - "The U.S. dollar languished uncomfortably close to record lows versus the euro on Monday as investors counted on an imminent cut in U.S. interest rates, with more to come in the months ahead.

      The euro was holding firm at $1.3876 and well within striking distance of last week's all-time highs around $1.3927.

      Traders reported solid support around $1.3845, which should hold while the world waits to see what the Federal Reserve delivers at its policy meeting on Tuesday.

      The market is convinced the central bank will cut the 5.25 percent funds rate by at least 25 basis points to help cushion the economy from the impact of the housing slump.

      "The Fed's policy meeting is looking more and more like a watershed event, not only for the U.S. markets but also for the entire global economy," said Robert Henderson, chief economist markets at nabCapital.

      He believes the Fed will not only cut by 25 basis points on Tuesday but by matching amounts in October and December.

      In contrast, several policymakers from the European Central Bank warned over the weekend that inflation risks in the euro zone were still on the high side, leaving the door open for a tightening once credit markets calmed down.

      Likewise, the Bank of Japan is still inclined to raise rates even if it holds policy steady as expected at its policy meeting this week.

      The Bottom Line:  U.S. Economy has FAILED... and let the bureaucratic finger-pointing begin!

      FRANKFURT (International Herald Tribune) - "Finance ministers and central bankers have long fretted that at some point, the rest of the world would lose its willingness to finance the United States' proclivity to consume far more than it produces - and that a potentially disastrous free-fall in the dollar's value would result.

      But for longer than most economists would have been willing to predict a decade ago, the world has been a willing partner in American excess - until a new and home-grown financial crisis this summer rattled confidence in the country, the world's largest economy.

      On Thursday, the dollar briefly fell to another low against the euro of $1.3927, as a slow decline that has been under way for months picked up steam this past week.

      "This is all pointing to a greatly increased risk of a fast unwinding of the U.S. current account deficit and a serious decline of the dollar," said Kenneth Rogoff, a former chief economist at the International Monetary Fund and an expert on exchange rates. "We could finally see the big kahuna hit."

      The euro, shared by 13 countries, once looked like a daring experiment. But it has gained credibility and euro-denominated financial assets are as good as their U.S. counterparts. With a slow economic overhaul under way in European capitals, and a fundamentally sound corporate structure, a weaker dollar justifiably means a stronger euro.

      "The euro has earned what it has gotten," said Stephen Jen, global head of currency research at Morgan Stanley in London. "It is not simply rallying by default."

      So long as Americans buy more than they earn from exports - and they did, creating a current account deficit of $850 billion last year - the rest of the world financed the binge by bringing dollars into the United States for investment in stocks, bonds, real estate or other assets, thereby preserving demand for the dollar.

      The continued appetite for U.S. investments stemmed from a track record of strong economic growth and a financial system that has been remarkably resistant to shocks.

      But the latest turmoil in mortgage markets has, in a single stroke, shaken faith in the resilience of American finance to a greater degree than even the bursting of the technology bubble in 2000 or the terror attacks of Sept. 11, 2001, analysts said. It has also raised prospect of a recession in the wider economy.

      While most economists just a few months ago would have dismissed the prospect of a dollar collapse outright, they now are debating the possibility that something on par with the dollar debacle of the 1970s might just happen again.

      When a currency collapses, the central bank can push up interest rates to attract needed investment, but strangle the economy in the process. Alternatively, it can let the currency fall and watch prices of imports - and eventually competing domestic goods - rise sharply.

      Double-digit inflation resulted in the 1970s and only a global recession brought it to an end.

      Today, the dollar's current weakness is being driven by uncertainty over how central banks will react to the turmoil in financial markets, unleashed by the collapse of the U.S. market for subprime mortgages given to borrowers with shaky credit histories.

      The European Central Bank put off an interest rate increase it had planned for September, but is still inclined to tighten credit at least one more time by the end of this year. By contrast, the U.S. Federal Reserve has hinted at a rate cut at its meeting next Tuesday - a step that would diminish the appeal of dollar-denominated assets, almost certainly sending the dollar lower.

      But across a horizon of 18 months to two years, investors are pondering how quickly the dollar will fall, a question to which there are no easy answers.

      After a run of strong growth, the U.S. economy has lurched into a phase of slower expansion, and last Friday the most serious warning sign appeared - an outright deterioration in employment growth.

      The data has coincided with profit warnings from major U.S. retailers like Wal-Mart Stores and Home Depot, suggesting that consumer spending, the backbone of the American economy for years, was ebbing. This step would logically follow the rapidly cooling housing market, since Americans have spent heavily with money borrowed against rising home values..."

      The Bottom Line:  Confidence is definately lacking.

      NEW YORK (Fox) -- "It was just after midnight when the 69th Squadron of Israeli F-15Is crossed the Syrian coast-line. On the ground, Syria’s formidable air defences went dead. An audacious raid on a Syrian target 50 miles from the Iraqi border was under way.

      At a rendezvous point on the ground, a Shaldag air force commando team was waiting to direct their laser beams at the target for the approaching jets. The team had arrived a day earlier, taking up position near a large underground depot. Soon the bunkers were in flames.

      Ten days after the jets reached home, their mission was the focus of intense speculation this weekend amid claims that Israel believed it had destroyed a cache of nuclear materials from North Korea.

      The Israeli government was not saying. “The security sources and IDF [Israeli Defence Forces] soldiers are demonstrating unusual courage,” said Ehud Olmert, the prime minister. “We naturally cannot always show the public our cards.”

      The Syrians were also keeping mum. “I cannot reveal the details,” said Farouk al-Sharaa, the vice-president. “All I can say is the military and political echelon is looking into a series of responses as we speak. Results are forthcoming.” The official story that the target comprised weapons destined for Hezbollah, the Iranian-backed Lebanese Shiite group, appeared to be crumbling in the face of widespread scepticism.

      Asked if they could be North Korean, he replied: “There are North Korean people there. There’s no question about that.” He said a network run by AQ Khan, the disgraced creator of Pakistan’s nuclear weapons, could be involved..."

      JAKARTA (Reuters) - "The toll from a severe earthquake on Indonesia's Sumatra island last week has risen to 23 dead and 88 injured, an official said on Sunday, and the area is likely to experience further significant aftershocks.

      The 8.4 magnitude quake struck off the coast of western Sumatra on Wednesday evening, and has been followed by at least 40 big aftershocks and several tsunami warnings, subsequently withdrawn.

      Aftershocks with a magnitude ranging from 3 to 5 are likely to be felt along Sumatra's west coast for the next two weeks, the Jakarta Post reported on Sunday, citing the head of the earthquake and tsunami division of the Meteorological and Geophysical Agency.

      Rustam Pakaya, a senior health ministry official, told Reuters that as of Sunday morning, a total of 23 people had died in Bengkulu and West Sumatra provinces, the two regions closest to the quake's epicenter, while 88 people had been injured.

      More than 22,000 houses in the area either collapsed or were damaged, Giri Trigondo, an official at the national disaster agency, said on Sunday.

      "Quake victims in some areas need food, cooking implements, tents, medicine," he said.