[O]n Tuesday March 15th, keenly-awaited figures from America’s Treasury showed a big increase in net purchases by foreigners of American long-term securities. The net flow in January ($91.5 billion) was 50% up on December’s figure ($60.7 billion), way over January’s trade deficit of $58.3 billion. Hidden in the figures were some interesting trends: purchases of American shares picked up, for example—which suggests a genuine fondness for the dollar unlikely to be unwound soon. But so too did purchases from the Caribbean—home to even more hedge funds than The Economist’s own St James’s Street—which could be liquidated tomorrow. Mark Austin, chief of foreign-exchange research at HSBC, a British bank, points out that central banks bought about the same amount as before, while private-sector purchases increased sharply. Is that positive for the dollar or negative? The currency rallied, though questions persisted.   The Treasury data tend to be volatile and in any event show only a portion of real flows. And one month does not a summer make. But taken together with other figures from the Federal Reserve showing an increase in February and early March in the securities it holds in custody for foreign owners, they do suggest two things. The first is that the full shock-horror scenario, in which Asian central banks dump the dollar and America promptly collapses, is way overdone. The second is that although Bretton Woods II is still in business, it is likely to change fundamentally.  

The fact is that the markets are hyper-sensitive to these figures, and analysts pore over them like Kremlinologists. The fear that central banks are contemplating industrial action against the dollar—and the collective sigh of relief when it seems they are not—is part of a broader unease about the nature and solidity of America’s economic growth. Based, as it is, on mammoth consumption by both the private and public sectors—i.e., on big trade and fiscal deficits—it needs foreigners willing to suspend disbelief and buy shiploads of securities denominated in a currency that has steadily lost value for about 40 years.

So far, the foreigners—mainly Asians plus a few outliers, including Russia and Brazil—have obliged, permitting America to scoop up 75% of the world's surplus savings. Together, Asian central banks have accumulated about $2.5 trillion in foreign-exchange reserves, up almost a quarter in little more than a year, most of it in dollars; Japan and China alone have reserves of nearly $1.5 trillion between them.

…But the Faustian deal into which Bretton Woods II has turned—whereby America gets to spend beyond its means and Asia gets to invest in export-led growth, at the cost of recycling much of its earnings in America’s securities markets—turns out to have a shorter horizon than most people reckoned. It could turn sour at any time now. And confirmation of that came from another set of economic data, released on Wednesday: America’s fourth-quarter current-account deficit widened to $187.9 billion, a record.

The dollar’s role as the reserve currency of discriminating central bankers everywhere has already lost ground. On figures from the Bank for International Settlements (BIS), the world held 76% of its reserves in dollars in 2000; by 2003, the proportion had slipped to 68%. Part of that reflects the dollar’s slide in value. But part reflects growing diversification, which is as it should be. Asian countries are trading more with each other these days, as well as with Europe. The euro now offers a liquid alternative to the dollar, and Europe shows no signs of wanting to flood the world with its paper.

Russia, Indonesia, South Korea, India and Japan have all murmured significantly, if guardedly, about diversifying of late. Though figures are elusive, the best guess is that most are doing so already. At the end of February, officials and academics from all around Asia met in Bangkok to discuss the sliding dollar and concluded that they should move more definitively to their own advantage. There are repeated suggestions that regional payments systems should be set up, such as the gold dinar standard proposed for the Islamic world in 2002 by Malaysia’s prime minister.

It is possible that, this time around, OPEC and other oil exporters will channel their windfall profits through the Treasury’s books. But what will happen if a significant portion of countries decided not to add to their dollar holdings? More than the dollar would weaken. Big foreign buyers of bonds have been keeping interest rates down, perhaps by one percentage point, as Alan Greenspan suggests. That would change, for a start. Without this support, the yield on the ten-year benchmark Treasury bond could rise to more than 5%, pushing up interest rates on mortgages. That, in turn, could prick America’s house-price bubble and prompt a general deleveraging, with implications for economic growth both in America and elsewhere. Standard & Poor’s, a rating agency, warned on Monday that a weak dollar would substantially increase concerns about credit quality.

This is perhaps not the week to air such apocalyptic concerns, though they are much on Buttonwood’s mind. In the end, what foreign central bankers have it in their power to do is to reveal before all the world that the mighty American economic empire has no clothes...

Outsourcing Innovation...And Everything Else

America's Has-Been Economy

By PAUL CRAIG ROBERTS

A country cannot be a superpower without a high tech economy, and America's high tech economy is eroding as I write.

The erosion began when US corporations outsourced manufacturing. Today many US companies are little more than a brand name selling goods made in Asia.

Corporate outsourcers and their apologists presented the loss of manufacturing capability as a positive development. Manufacturing, they said, was the "old economy," whose loss to Asia ensured Americans lower consumer prices and greater shareholder returns. The American future was in the "new economy" of high tech knowledge jobs.

 

This assertion became an article of faith. Few considered how a country could maintain a technological lead when it did not manufacture.

 

So far in the 21st century there is scant sign of the American "new economy." The promised knowledge-based jobs have not appeared. To the contrary, the Bureau of Labor Statistics reports a net loss of 221,000 jobs in six major engineering job classifications.

 

Today many computer, electrical and electronics engineers, who were well paid at the end of the 20th century, are unemployed and cannot find work. A country that doesn't manufacture doesn't need as many engineers, and much of the work that remains is being outsourced or filled with cheaper foreigners brought into the country on H-lb and L-1 work visas.

 

Confronted with inconvenient facts, outsourcing's apologists moved to the next level of fantasy. Many technical and engineering jobs, they said, have become "commodity jobs," routine work that can be performed cheaper offshore. America will stay in the lead, they promised, because it will keep the research and development work and be responsible for design and innovation.

Alas, now it is design and innovation that are being outsourced. Business Week reports ("Outsourcing Innovation," March 21) that the pledge of First World corporations to keep research and development in-house "is now passé."

Corporations such as Dell, Motorola, and Philips, which are regarded as manufacturers based in proprietary design and core intellectual property originating in R&D departments, now put their brand names on complete products that are designed, engineered, and manufactured in Asia by "original-design manufacturers" (ODM).

Business Week reports that practically overnight large percentages of cell phones, notebook PCs, digital cameras, MP3 players, and personal digital assistants are produced by original-design manufacturers. Business Week quotes an executive of a Taiwanese ODM: "Customers used to participate in design two or three years back. But starting last year, many just take our product."

 

Another offshore ODM executive says: "What has changed is that more customers need us to design the whole product. It's now difficult to get good ideas from our customers. We have to innovate ourselves." Another says: "We know this kind of product category a lot better than our customers do. We have the capability to integrate all the latest technologies." The customers are America's premier high tech names.

 

The design and engineering teams of Asian ODMs are expanding rapidly, while those of major US corporations are shrinking. Business Week reports that R&D budgets at such technology companies as Hewlett Packard, Cisco, Motorola, Lucent Technologies, Ericsson, and Nokia are being scaled back.

 

Outsourcing is rapidly converting US corporations into a brand name with a sales force selling foreign designed, engineered, and manufactured goods. Whether or not they realize it, US corporations have written off the US consumer market. People who do not participate in the innovation, design, engineering and manufacture of the products that they consume lack the incomes to support the sales infrastructure of the job diverse "old economy."

 

"Free market" economists and US politicians are blind to the rapid transformation of America into a third world economy, but college bound American students and heads of engineering schools are acutely aware of declining career opportunities and enrollments. While "free trade" economists and corporate publicists prattle on about America's glorious future, heads of prestigious engineering schools ponder the future of engineering education in America.

 

Once US firms complete their loss of proprietary architecture, how much intrinsic value resides in a brand name? What is to keep the all-powerful ODMs from undercutting the American brand names?

 

The outsourcing of manufacturing, design and innovation has dire consequences for US higher education. The advantages of a college degree are erased when the only source of employment is domestic nontradable services.

 

According to the Los Angeles Times (March 11), the percentage of college graduates among the long-term chronically unemployed has risen sharply in the 21st century. The US Department of Labor reported in March that 373,000 discouraged college graduates dropped out of the labor force in February--a far higher number than the number of new jobs created.

 

The disappearing US economy can also be seen in the exploding trade deficit. As more employment is shifted offshore, goods and services formerly produced domestically become imports. Nothink economists and Bush administration officials claim that America's increasing dependence on imported goods and services is evidence of the strength of the US economy and its role as engine of global growth.

This claim ignores that the US is paying for its outsourced goods and services by transferring its wealth and future income streams to foreigners. Foreigners have acquired $3.6 trillion of US assets since 1990 as a result of US trade deficits.

Foreigners have a surfeit of dollar assets. For the past three years their increasing unwillingness to acquire more dollars has resulted in a marked decline in the dollar's value in relation to gold and tradable currencies.

Recently the Japanese, Chinese, and Koreans have expressed their concerns. According to Bloomberg (March 10), Japan's unrealized losses on its dollar reserve holdings have reached $109.6 billion.

The Asia Times reported (March 12) that Asian central banks have been reducing their dollar holdings in favor of regional currencies for the past three years. A study by the Bank of International Settlements concluded that the ratio of dollar reserves held in Asia declined from 81% in the third quarter of 2001 to 67% in September 2004. India reduced its dollar holdings from 68% of total reserves to 43%. China reduced its dollar holdings from 83% to 68%.

 

The US dollar will not be able to maintain its role as world reserve currency when it is being abandoned by that area of the world that is rapidly becoming the manufacturing, engineering and innovation powerhouse.

 

Misled by propagandistic "free trade" claims, Americans will be at a loss to understand the increasing career frustrations of the college educated. Falling pay and rising prices of foreign made goods will squeeze US living standards as the declining dollar heralds America's descent into a has-been economy.

 

Meanwhile the Grand Old Party has passed a bankruptcy "reform" that is certain to turn unemployed Americans living on debt and beset with unpayable medical bills into the indentured servants of credit card companies. The steely-faced Bush administration is making certain that Americans will experience to the full their country's fall.

GM announces sharply lower profit figures

Decline of auto giant highlights crisis of US manufacturing

By Joseph Kay
18 March 2005

General Motors announced Wednesday that it faces a huge loss for the first quarter of the year and much lower profits than previously projected for all of 2005. The news from GM, the world’s largest auto manufacturer by sales, provoked a sell-off of the company’s shares on Wall Street.

 

Chief Executive Officer Rick Wagoner and Chief Financial Officer John Devine announced that the company expects to post a loss of about $846 million ($1.50 per share) for the first three months of 2005. This would be GM’s largest quarterly loss since 1992, when it was on the verge of bankruptcy. The company had previously announced that it would break even for the quarter. GM also revised downward its expected profits for 2005, from $4-$5 per share to $1-$2 per share, excluding one-time expenses.

 

Following the announcement, the price of GM stock plummeted, ending the trading day down by 14 percent. The sell-off eliminated some $12.7 billion in shareholder equity. It was the steepest decline of the company’s stock since the stock market crash of 1987. During trading on Thursday, share prices fell below $28, down from over $80 five years ago.

 

Indicating the lack of confidence of investors in the future of the company, GM’s bond rating was downgraded by all major ratings firms. Its bonds are now hovering just above junk bond status. A junk bond rating means investors are skeptical that the company will pay off its debts. If the rating is downgraded any further, GM will face sharply higher interest rates on the bond market, further eroding its bottom line.

 

A downgrading to junk status could trigger a sell-off with serious consequences for the broader bond market. One Wall Street Journal article on Thursday began by noting that the announcement by GM has prompted “investors [to reassess] the risk of lending money to US companies.”

 

…At the same time it announced its new profit figures, GM made it clear that it plans to place the burden of the company’s problems on the backs of its workers. All 38,000 North American salaried employees will be denied merit pay raises this year, and the company plans to reduce its contribution to retirement accounts for all workers by 60 percent.

 

To cut production, GM has scheduled for this summer the permanent closure of three assembly plants. They are located in Baltimore, Maryland; Lansing, Michigan; and Linden, New Jersey. The closing of the Lansing plant alone will result in 3,000 layoffs. Other plants are scheduled for temporary shutdowns, including the truck assembly plant in Janesville, Wisconsin.

 

These, however, are merely preliminary measures. Wagoner said that while the company “made a lot of progress on reducing structural costs, what we have saved on the operating side has been filled in by higher legacy costs...We need to be more creative and more effective in addressing legacy costs. They are kind of swamping a competitive operational performance.”

 

Put more simply, pension and health benefits that GM workers were able to win over previous decades are to be sacrificed to improve the company’s bottom line. GM’s health care spending alone is expected to rise to $5.6 billion in 2005, up from $5.2 billion last year. Over 1.1 million Americans—including current workers, retirees and their families—are presently covered by GM health care obligations, making the company the largest private health care provider in the country.

 

In addition to benefits such as health care and pensions, GM workers have won the right to continue to receive compensation—at least 75 percent of their pay—after being laid off. From the perspective of management and Wall Street, all of these “legacy costs” are intolerable constraints on the company’s ability to radically restructure itself so as to once again become profitable.

 

Wall Street analysts are placing pressure on the company to take ruthless measures. Stephen Girsky, chief auto analyst at Morgan Stanley, argued, “The company’s market share doesn’t support its size. They have too many plants, too many workers, too many models, too many dealers and their employee benefits are too high.”

 

…A crisis of American manufacturing

 

The deep problems that have again come to the surface at General Motors are an expression of a protracted decline of profitability in American manufacturing. Once the paragon of the US economy, the auto industry has undergone a profound decay over the past several decades.

 

GM once claimed, “What’s good for GM is good for America.” It can be said today that what ails General Motors is what ails American industry. GM is now a symbol of the decline of American economic dominance.

 

The problem of profitability at GM is not new. Over the past two decades, the company has seen its US market share steadily erode, from a high of over 50 percent during the post-war period. As its manufacturing has declined, GM has increasingly relied on its financing arm, General Motors Acceptance Corp (GMAC), to remain profitable. In addition to auto financing, GMAC finances home mortgages and engages in other activities unrelated to the auto industry. In recent years, GM would have been consistently in the red if it were not for GMAC.

 

GM’s reliance on its financial subsidiary is indicative of the increasingly subordinate role played by manufacturing in the American economy. As profits from production have declined, the American ruling elite has turned to various forms of financial speculation that do not actually produce anything of value. At the same time, it has sought ever more systematically to shift production from the US to impoverished regions of the world where labor costs are far lower. This process is a concentrated expression of the increasing parasitism of American capitalism.

 

The crisis of General Motors reveals the underlying weakness of the American economy, which, in turn, provides an insight into the driving forces behind the explosive growth of American militarism. Internally corroded, American capitalism turns more and more to military violence to maintain its position of dominance and impose American-style “free market” relations in every part of the world.

While there are not enough members of Congress willing to oppose the building of roads in wilderness areas or the gutting of the Clean Air Act, many do take those positions. Such issues are OK to discuss in polite society. On the other hand, when did you last hear a national politician say, "This economy's growing too fast, and if elected, I'll work to cut growth!"?

 

They never say that, because they would be admitting that capitalism is unsustainable. There is no such thing as capitalism without growth. Capitalists -- a class of folks whose income is "unearned" (a term devised and used, with uncharacteristic clarity, by the IRS) -- have a well-understood role in society: to take a pile of money and turn it into a bigger pile of money.

 

But a bigger pile of money, once achieved, is not an end but another beginning. To the capitalist, that pile is useless unless it can be turned into an even bigger pile. As a result, more resources are used and wastes expelled this year than last, and even more next year.

 

Now, if you're a politician or, say, a liberal pundit, you can't very well tell working people, "I'm afraid that our capitalist class is going to be needing an increasingly bigger share of our national income for a while -- well, um, actually forever -- and it's all going to have to come out of your paychecks."

 

Instead, you talk about economic growth and its seemingly miraculous ability to keep boosting the capitalist's return on investment while not completely wiping out the workers who generated it. No problem: Money's imaginary, so bigger piles of it are always possible, and there is no biggest pile.

 

But, of course, we do have a problem. We have no infinite piles of the stuff (even the renewable stuff) that's needed to turn money into more money. There's a rule that no species can increase its resource exploitation infinitely, and Homo sapiens has not been granted a waiver. Fossil fuels, soil, salmon, and healthy ecosystems are real, and the rules that apply to money -- which is no more real than 'Monopoly' money -- don't apply on planet Earth.

 

… Those who want to square the circle, to have infinite economic growth on a finite planet, generally invoke greater efficiency. Technology is supposed to let businesses generate more monetary wealth while using and abusing less of the material world.

 

Now, nobody -- no CEO, no environmentalist, not even the Antichrist -- is going to argue against efficiency. But capitalism has a way of turning good things inside out.

 

If you're a business owner, and you find you can produce the same number of lawn chairs or helicopters while spending less on energy, materials, labor, or waste disposal, that's efficiency, and that means money in the bank for you. But it's your job as a good capitalist to get that money out of the bank, ASAP, and invest it in the real world, where you can turn more stuff into more money. (No matter if demand is down -- buy advertising!)

 

In a growth-dependent economic order, efficiency simply provides more opportunities for production and consumption. Relying on efficiency to make growth less destructive is like trying to run up a "Down" escalator that never stops accelerating.

 

Ecological economics, a heretical branch of the discipline, has demonstrated conclusively that if we're to live within our material means, planet-wide, we must (1) limit our species' rate of reproduction, (2) hold our "throughput" of resources and wastes down to a sustainable level, and (3) set upper and lower limits on monetary wealth and income. These policies make up a package; following only one or two of them won't do the job.

 

While most ecological economists are not explicitly anti-capitalist -- that is, they do not advocate taking society's most important investment decisions out of the hands of an unelected capitalist class and putting them into democratic institutions -- it is difficult to see how capitalists or capitalism could flourish in the kind of world they envision.

 

And there are ways of making investment decisions democratic. For example, in his book After Capitalism, David Schweikart outlines a vision of the future that we all would find familiar, with private property, buying, selling, profits, and entrepreneurs - but without capitalists! Letting all of society, not just a tiny sliver, decide how to invest would not by itself stop the cancerous growth that's killing the ecosphere. But it's the necessary step.

SINGAPORE - The dollar rose to its highest since March 8 against the euro supported by expectations the U.S. authorities may use more aggressive language on interest rates this week.

"The dollar is being bid higher and I think we'll breach the yen's Friday ranges as well," said a dealer at an Asian bank.

The euro fell to $1.3256 before recovering by 9:25 p.m. EST to around $1.3266, which is down 0.34 percent from the New York close of $1.3311.

The dollar was trading at 104.90 yen stronger by 0.23 percent from Friday's New York close of 104.69.

Markets have priced in a quarter percentage point rise in interest rates this week by the U.S. Federal Reserve's policy makers, who are due to meet on Tuesday.

Attention is on the possibility that the statement accompanying the rate decision may suggest the central bank might take more aggressive action in the coming months by removing the word "measured" when it refers to rate increases.

Your book Angelology of History cannot be compared to anything else as far as its contents, meaning, and atmosphere are concerned. Many think of it as your debut. How do you see it, the fact that you are an exceptionally atypical and successful debutant?

In truth it is my second book. During the years 1993 and 1994 I lectured about the role of Europe in the world organism, and from these lectures arose a book in 1995 entitled The Spiritual Role of Central Europe, or how politics are linked to fairy tales if you like. It dealt with spiritual geography.[...]

The Earth is a living organism (Gaia), and has organs analogous to those of a person. Europe appears as the female heart - the central point between the head (western) and the limbs (eastern). Europe pulses like a heart: one by one accepting cultural influences from the West and from the East, and uniting them. [...]

The psychiatrist Roger Sperry got the Nobel prize for the discovery that the most creative people are those who can flexibly utilize both hemispheres of the brain. To harmoniously connect intuitive and rational awareness. The least successful people are those who employ only one of these two manners. In situations where the opposite approach is required, they fail. Something similar can be said for the Earth as a whole.

A creative cultural impulse is expected from Europe. If there is anyone who can find a solution to the Arab-American conflict, it will be Europe. Slavic people will have to play a special role in this, unfortunately, they do not recognize this yet. My first book showed how in global sociology an ancient archetype is at work, well-known from Persian myths, and even made into the film Ladyhawk. In this story the cursed lovers can never meet, because she is a hawk during the day and a lady only at night, while he was a man during the day and a wolf at night. This is a metaphor for the immeasurable lack of understanding between people of the East and the West.

So the cultural force must come from the center, from Europe. If you had been born in Korea, would you not see the East and West as something entirely different?

Every native culture has always claimed that they are the center of the world. There is a little truth to that, for the placement of such an individual really is the center of the world. I am dealing with something more: the objective judgement of the various spiritual characteristics of nations. This is an observation of an empirical nature, from which it can be seen that the West and its characteristics is the opposite of the East. So the middle cannot be moved to Korea or California upon request.

Post-modern anthropology has arrived at cultural relativism, which sees everything to be equal, up to the point where it refuses to take advancements into consideration. In pratice nobody directs themselves according to this, it is academically astray. If a cannibal came up and wanted to make soup from the cultural relativists, none of them would stick to their professional credo.

As people, we are potentially blessed with equal spiritual gifts, but that is not to say that we are all equal, and we are not at the same level of development - not as individuals, nor as a culture.

In each epoch different roles must be filled, and the baton of cultural advancement is taken by one group of nations, people suitable for this because of their specific characteristics. At one time it was the Greeks and Romans, now it is the Anglo-saxon nations and the Slavs are still preparing for their role.[...]

The American biographical institute has placed you among the leading thinkers of the world within your field. It is quite noteworthy, that in your Angelology, you managed to combine science, art, and religion.

Current science is based on the premise that it is without a soul.[...]

Getting to the root of things around us will not come about by emotionally distancing ourselves from them, but only if we manage to `feel` within them. When emotional power is refined and cleansed, it can become an objective observational instrument, and not just a descriptive factor. [...]

I work with a kind of scientific-poetic method. The results of my Angelology are in agreement with the oldest religious traditions of mankind, they are inseperable from artistic awareness, at the same time they are scientific fact, demonstrable by `hard` methods.

In your research you concentrate on history. It is interesting that you discover no new occurences or documents, you interpret well-known historical facts in different ways. Is it enough to have a framework which offers `another way`, and then bring something new into light?

The greatest discoveries throughout history happened when somebody gave new meaning to something which had been generally known for a long time. Newton recognized that the Moon goes around the Earth because of mutual attraction, Galileo discovered the law of the pendulum by loking at a swinging church lamp.

I have discovered rhythm in history, it was always there but no scientist picked up on it. [...]

Ancient teachings about the exchange of spirits of time was not something dreamed up by myself, but is well known from traditions. I did not judge historical facts, but left it up to the leading professionals. I merely pointed to the systematic agreement between the periodic shifting spirits of time and cultural waves throughout history. These are evident facts which speak for themselves.

The point was that I looked at facts where no one else saw any relation, with somewhat different eyes, and everything suddenly fell into place like a jigsaw puzzle.

I never could have solved this puzzle without personal experience with sublime angelic beings. Something like this is not speculation, but rather a gift.

Intelligible evidence and scientific statistics are less significant in my book. They are there for those who require them.[...]

You maintain the existence of a qualitative structure of time, with the assumption that changes within history were inspired by spiritual beings. You also mentioned Jung's aphorism that a genius is not someone who has an idea, because the idea has him. To be brief: history is inspired by angels, the idea has the person, what then is the share given to individuality as far as the evolution of mankind?

In my book, I showed how geniuses catch inspiration from the spirit of the era, sometimes two or three of them, independant of each other from different places around the world, and sometimes they sacrifice their entire personal life with the aim to be like a mother who is about to give birth to the idea.

Long before the individual had his own thoughts, there were world ideas, ideas of the spiritual beings of creation, these were carried by the spiritual atmosphere of the cosmos and the Earth. [...]

Now spiritual beings await that the humanity into which they invested, will enrich the universe as well as themselves with completely new ideas. Ideas which they themselves cannot and do not have, for none of them had been incarnated on the Earth, nor had they gone through human experiences, like love for example.

Do you believe that the individual may influence what goes on around him, to the point where it may be aimed towards positive goals?

Let`s not look upon the individual as a drop in the sea, but more like a spark in a haystack. From a spiritual standpoint, what is decisive is quality and not quantity. One may influence a million others. It depends on the quality. A thousand blind cannot help themselves, but one who sees may lead them from the darkness.

So the individual is a spark in a haystack. As far as I see, this is a question of faith and optimism. I could say that the individual is a spark in a wet haystack...

Herakleitos split the soul into the `dry` and the `wet`. The wet are tied to things material, and the dry are inclined toward things spiritual. The level of dryness is the level of the preparedness of the soul. The spark in my analogy should be understood as such, that only a prepared spirit may ignite it. But there is no useless spark, if it does not set fire, at least it dries. Yes, this can go on for centuries, for people need time." [...]

In the age of genetic, chemical, virtual, commercial, and other kinds of manipulation, is it still worthwhile to rely on the individual?

All kinds of manipulation have one thing in common, and that is taking the individuality from a person in one way or another. Real truth and beauty are the same thing. As Chesterson said: If we want to get to the truth, we have to get back to the fairy tales and myths.

Currently, the spirit of the times is Michael the archangel of the Sun, who battles the dragon. [...]

Two kinds of demon - demons of power and demons of form - beset Michael from both sides.

Demons of form try to entirely forge the human spirit to the material, and demons of power want to pull it into illusory inner worlds.

This architypical occurance, which is currently in the collective subconscious of mankind, is reflected in societal evolution. Some of it is seen in the consumeristic materialism connected to science, and another type in the secular, nationalistic, and other types of collective fanaticism. It is like Skylla and Charybda - who is not attacking the one, attacks the other.

Secretly, the forces of evil have united and have a common goal: to stop the genesis of the higher `I` within the soul of the individual... The egoism of consumption as well as collective fanatacism exterminate the true spiritual basis of a person, changing us into a certain kind of machine.

Exactly at the time when the battle between good and evil is increasing in intensity, there has been given a chance to the free and individual soul, which is the symbol of Christ, to be born within us. Believe that a higher Wisdom is watching over us all."

Modern theology has emptied out the space between man and God. You have filled it again with a hierarchical world of angels. Have you forgotten about God, is he there?

Of course he is, but God is very high up. Originally in Christianity the world was immediately above us, where there resided a number of beings, creations and spheres... Then somewhere on the peak of all this, at a remarkable distance sat the Creator, the Highest. Only the idea of God has remained in today`s theology, which has become quite abstract, and the earthly person - and the hierarchy of spiritual worlds has somehow faded away. Angels have been sent to the children`s rooms. Church intellectuals today imagine that, apart from the abstract God, there exists only the tangible world and nothing else. For me, I am seeking concrete recognition of the individual spiritual beings above us, real spirituality, for only that may be applied to life.

Along with your book there are lectures. What are the reactions of people?

That which I bring to the table is so uncommon, that no set opinion of it has been made yet. I meet with the whole spectrum of reactions, from swept away to catagorical refusal. But the noteworthy fact is that at my lectures I have the atheist sitting next to the believer, the Christian priest next to the Buddhist and the Yogi, natural scientists, experts of the humanities, and the layman, the youth, the pensioner, members of all political parties - and they all manage to agree on something. Have you seen this before?

In connection with Christmas coming, it is well known that Jesus was born on the cusp of the millenium into a poor household, your book also was `born` at the the turn of the millenium, and truly not into wealthy circumstances... How do you consider this parallel?

I do not want to be compared with Jesus. Yet in a certain sense, anyone who has `left their home for the truth`, or rather puts spiritual things above the material, is walking in His footsteps, and therefore will have it hard in this world. This is what I have done, publishing a book in place of a roof over my head. I am not hoarding treasures here to be destroyed by moths and rust, but within eternity.

A Hebrew newspaper Yedioth Ahronoth had reported that Israeli Prime Minister Ariel Sharon last week approved the construction of 3500 new homes in a bid to secure "Greater Jerusalem," which will be two new neighborhoods linking the settlement of Ma'aleh Adumimto East Jerusalem.

Government sources have confirmed the report apart from the number of homes, said the Ha'aretz daily.

The sources said the number of new homes would be in the "low thousands", said the daily, adding Sharon had also ordered the building of a road to bypass the area and link the Palestinian-ruled cities to the north and south of Jerusalem, Ramallah and Bethlehem.

"The prime minister is thinking ahead to give the Palestinians territorial contiguity," the daily added.

The blueprint for new homes appeared to flout the US-backed roadmap peace plan, whose final vision is disputed by Israel and the Palestinians.

The road map requires a halt to settlement-building on land Israel captured in the 1967 Middle East War, where the Palestinians want as part of a future state.

But US President George W. Bush said last year that Israel,which intends to quit the occupied Gaza Strip this year, could expect to keep some West Bank settlement blocs under an accord.

The Palestinians, whose leader Mahmoud Abbas joined Sharon last month in declaring a cease-fire and wants East Jerusalem for the capital of the future Palestinian state, accused the Jewish state of poor faith in peacemaking.

Palestinian Cabinet Minister Saeb Erekat condemned the reported expansion, saying "if this project is carried out that means shutting the door for negotiations and peace."

"This project intends to determine the future of Jerusalem by settlements and not negotiations," he added.

Palestinian Planning Minister Ghassan al-Khatib also denounced that "by expanding settlements in the West Bank, Israel gives the impression that it intends to exchange Gaza for a 'Greater Israel'."

"Israel is responsible for any consequences resulting from this continuous violation of the road map," he said. "I don't think the Palestinian leadership and people can tolerate this."

I don't have a dog in the fight about who killed Rafiq Hariri, but I don't find the case for the Syrians being behind it is airtight.

I worked for Monday Morning Co. in the late 1970s in Beirut as a journalist/translator and the Syrian secret police used sometimes to pull my articles in the most heavy-handed manner. Although the Syrians came into Lebanon on the pretext of establishing order, they appear to have mainly played various factions off against one another in a cynical way that harmed the subsequent development of Lebanon. So if I am completely honest about my own biases and life-experiences, I am deeply critical of the Syrian presence in Lebanon.

But the question of who killed Hariri is highly significant and it is important not to let our prejudices affect our judgment. The judgment has been made by the political opposition in Lebanon for local reasons, but it seems likely that a majority of Lebanese thinks someone beside Syria was responsible (not all Sunnis, Maronites and Druze have adopted the Syria theory, and Zogby showed that 70 percent of Shiites-- who are some 40 percent of the population-- have not.)

To the state of the case so far: 1) It seems likely that Hariri was killed by a powerful car bomb that pulled alongside his vehicle. 2) It seems likely that he was assassinated by a Palestinian radical Muslim fundamentalist named Ahmed Tayseer Abu Adas, even if someone else was driving the car. Mixing planners and "muscle" is an al-Qaeda modus operandi. 3) If Abu Adas was behind it, he made his motivation clear. He was striking at what he considered a major agent of Saudi influence in the Middle East.

Saudi Arabia has been a consistent target of radical jihadis for the past three years. Initially they attacked sites associated with the training of bodyguards for the royal family or other Saudi targets. This strategy produced a popular backlash against them. Al-Qaeda has some political support in some regions of Saudi Arabia, and it should be remembered that Islamists did well in the recent municipal elections, so al-Qaeda there is sensitive to public opinion.

Therefore, during the past year the jihadis in Saudia have shifted to attacking Saudi Arabia's conduits to the outside world. The shift in the strategy of Saudi al-Qaeda was noted in the Washington Post.

The US consulate in Jidda was targeted, along with foreign workers in the kingdom. Saleh al-Awfi, the current al-Qaeda leader in Saudia, has stressed internationalization and called for Saudi volunteers to fight in Iraq, e.g.

Moreover, there seems to be a Lebanon element in the latter strategy. Although I am careful about depending on Debka, this report is suggestive in our context.

It links Lebanese radical fundamentalists, their recruits at the Ain Helweh Palestinian refugee camp, and a bombing of the Muhaya Quarter of Riyadh, targeting Lebanese residents there.

Since Saudi targets have hardened up, for such groups to turn to what they consider Saudi clients elsewhere in the region makes perfect sense.

As for Hariri, Greg Lamotte of VOA noted his long career in Saudi Arabia and his close ties to the royal family, writing: "During the 1980s, Mr. Hariri acted as a personal emissary to Lebanon for Saudi King Fahd."

Some have pointed out that "al-Qaeda" disclaimed responsibility for the Hariri assassination. But al-Qaeda is not a top-down organization, especially now. Some al-Qaeda-linked web site disclaimed responsibility. Besides, al-Qaeda did not claim responsibility. Abu Adas's small Jihadi group did. Their claim of being an al-Qaeda franchise may be an informal one. Finally, al-Qaeda routinely disclaims credit for its operations, and Bin Laden initially denied involvement in 9/11!

Comment: Poor Mr. Cole. He still believes the official story on 9/11! He is also blissfully free of any understanding that al Qaeda is a CIA asset, which, in the context of this story, changes the entire understanding.

The Syrian secret police had means, motive and opportunity, and must be put on the suspect list.

But from a Gulf perspective, and from the perspective of the recent history of transnational jihadi terrorism, a radical anti-Saudi hit on Hariri is perfectly plausible and also cannot simply be dismissed. It should be remembered that 9/11 initially struck many in Washington as so weird and illogical that they assumed Iraq was the real culprit. Transnational terrorism has its own logic, and its targets can strike outsiders as oddly decontextualized. From within the movement, however, Hariri may have looked like a Saudi cat's paw, and hitting him a way to reduce Saudi influence in Greater Syria. The point is gradually to isolate the Saudi royal family, weaken them, and then finish them off. It is a crackpot plan, and it would be doubly tragic if Hariri was the victim of this kind of thinking. It is too early to know for sure, and better to reserve judgment.

WASHINGTON - US Defense Secretary Donald Rumsfeld said he had never authorized sending reconnaisance planes over Iran to spy on the country's alleged nuclear program, contrary to Tehran's assertions.

"I checked and I know we had no US aircraft doing what ... Iran was saying," Rumsfeld told ABC television's "This Week" program.

"What investigations we've been able to undertake have suggested that the charge was false -- either intentionally or through ignorance, and that it may very well have been Iranian air activity in that country by elements of the government that were not coordinating with other elements of the Iranian government," the defense chief said.

Rumsfeld was less categorical in his denial when pressed about whether he had ever authorized any US military overflights of Iran during his tenure as defense secretary.

"I don't think I have, but I don't know. I'd have to check. And I don't know that I'd answer it if I did find out that we had, but I don't believe we have," he said. [...]

Recent US news reports said US drones have been overflying Iran since April 2004, gathering intelligence on Iran's nuclear program and probing for weaknesses in Iran's air defenses.

The reported spy flights have raised concerns about US military preparations for possible strikes on suspected Iranian nuclear weapons sites.

US officials have refused to rule out a military option, but have indicated they are giving international diplomatic efforts a try first. [...]

VIENNA - Iran is to establish a secret nuclear engineering faculty within a year to provide engineers for what the United States claims is a covert project to develop atomic weapons, a Western intelligence source told AFP.

"This is a very significant step towards training an Iranian nuclear cadre," the source, who asked not to be named, said in a recent interview.

The Sunday Telegraph newspaper reported in London Sunday that Iran has approved a secret nuclear research center to train scientists in atomic technology.

Iranian officials, questioned by AFP recently, have so far declined to comment on this matter.

"The declared purpose for establishing the faculty is to create a source of skilled and professional manpower to promote Iran's military nuclear project, whose activity is increasing," the source told AFP.

"By setting up this installation, the Iranians are trying to make sure they have trained people whom the West doesn't even know about," the source said.

The allegation comes despite growing pressure on Iran from the United States and the European Union to guarantee that it will not use its atomic energy programme to acquire nuclear weapons.

Washington claims Iran is secretly developing nuclear weapons but Iran says its nuclear programme is a peaceful project to generate electricity for civilian use.

"The Atomic Energy Organisation of Iran (AEOI) has received approval from the regime for the ministry of education to establish a secret faculty of applied nuclear engineering and materials engineering," the source said.

"The faculty will concentrate only on nuclear topics and will build and train a new generation of engineers, who will be able to immediately work on highly secret projects as soon as they complete their studies."

Mohamed ElBaradei, head of the Vienna-based International Atomic Energy Agency (IAEA), said earlier this month that the IAEA has not found weapons work in Iran after two years of investigations but that "the jury is still out" on whether the Islamic Republic's nuclear intentions are peaceful. [...]

"In practice the faculty is to be set up within a year. It will operate as a branch of one of the leading universities in Iran in nuclear science and its activity will be mainly classified." [...]

The Pentagon is investigating itself again, this time on the Sgrena attempted assassination, and, as always, will find itself to be all good. In order for the rest of us to accept the checkpoint accident theory, however, we would have to accept the following:

1. that Sgrena and the surviving Italian secret service agents in the car managed to agree on a consistent package of lies in the moments between the shooting and the arrival of the Americans at the car;

2. that the consistent stories of the Italians, who had no reason to lie, were lies, and the story of the Pentagon, which had a big reason to lie, was the truth;

3. that the car in which the Italians were travelling was subject to a barrage of American fire by panicking American soldiers but suffered only minimal strategic hits (click on the row of pictures to see the car), with the main one to Nicola Calipari, as he threw himself in front of Sgrena;

4. that the Americans were unaware of the nature of the car despite the fact that the car had already passed through American checkpoints, despite the fact that Italian authorities insist the Americans were notified, and despite the fact that it would just be common sense for an secret service agent of an American ally with a valuable cargo to notify the Americans that he was delivering the cargo to the airport (although he may have failed to explain the full nature of his passenger for fear of another American assassination of a journalist;

5. that the checkpoint - which was just around a blind corner so that an unsuspecting driver, even driving slowly, would come upon it quickly - just happened to be set up at the last possible point the Italian car would be passing before Sgrena was on an airplane for Italy, where she would be free to tell her tales of Falluja;

6. that John Negroponte, who couldn't take the usual helicopter because of a storm, decided to take a car ride through the extemely dangerous streets of Baghdad in order to attend a meeting at Baghdad airport, rather than cancel or postpone the meeting; and

7. that of all the American soldiers in Baghdad available to shoot at Sgrena's car, the ones at ther airport just happened to be John Negroponte's bodyguards, lingering at a 'temporary' checkpoint long after his car had passed.

If you're ready to believe all that, I'd advise you to go out and buy a lottery ticket right now, as this must be your lucky day. The Italians, immediately on finishing their preliminary investigation, rather pointedly announced the withdrawal of Italian troops from Iraq, so we know what they think. This withdrawal, since rescinded by Berlusconi under direct pressure from Bush, is the best indication of the truth. Berlusconi is desperate to remain Bush's poodle, and is willing to piss on the grave of Nicola Calipari in order to stay in the doghouse. John Negroponte, stone-cold killer, is leaving Iraq to take up his new post as Bush's new national intelligence director. Americans, not to mention everybody else, should be very afraid.

BAGHDAD, IRAQ - U.S. troops killed 24 insurgents in a gun battle near Baghdad, while at least nine people – including an American soldier – died in violence elsewhere in Iraq on Sunday.

A U.S. military convoy was travelling about 30 kilometres south of the capital when it came under fire. The attack wounded six soldiers and seven militants as well as killing two dozen insurgents, the U.S. military said.

The fight came as Iraq and Jordan withdrew their ambassadors from each other's countries Sunday. Shia Muslims accuse Jordan of harbouring terrorists who are entering Iraq to launch attacks.

Meanwhile, the Iraqi chapter of al-Qaeda claimed responsibility for a suicide bombing that killed the head of the police anti-corruption unit in the northern city for Mosul.

The militant group is led by Abu Musab al-Zarqawi, who was born in Jordan.

Other violence on Sunday included:

• A bomb exploded near the northern city of Kirkuk, killing a U.S. soldier and injuring three others, the U.S. military said in a statement.

• Militants opened fire on a policeman who was walking to work in Samarra, about 100 kilometres north of Baghdad. Officers who tried to collect his body were also caught up in the battle, which wounded three policemen and three attackers.

• A roadside bomb went off as police patrolled past in the southern city of Basra, killing a civilian and injuring a policeman.

• A car bomb at a checkpoint in Baqouba injured 10 Iraqi soldiers and two civilians. Three militants were killed in ensuing clashes.

When you hear Zarqawi mentioned in the news just have a think about the following...

A Jordanian extremist suspected of bloody suicide attacks in Iraq was killed some time ago in U.S. bombing and a letter outlining plans for fomenting sectarian war is a forgery, a statement allegedly from an insurgent group west of the capital said.

Abu Musab al-Zarqawi was killed in the Sulaimaniyah mountains of northern Iraq “during the American bombing there,” according to a statement circulated in Fallujah this week and signed by the “Leadership of the Allahu Akbar Mujahedeen.”

The statement did not say when al-Zarqawi was supposedly killed, but U.S. jets bombed strongholds of the extremist Ansar al-Islam in the north last April as Saddam Hussein’s regime was collapsing.

It said al-Zarqawi was unable to escape the bombing because of his artificial leg. [MSNBC 3/4/04]

Arab commentator Abd al-Bari Atwan says it is quite possible that al-Zarqawi is now dead.

He told Aljazeera.net: "There is no real proof that he is alive. If he is supposedly moving around freely in Iraq, why haven't Iraqis spoken about him? He can't be that difficult to recognise with his wooden leg." [Aljazeera]

MOSUL, Iraq - A suicide bomber killed the head of the Iraqi police anti-corruption department in the northern city of Mosul yesterday.

A United States lieutenant-colonel said the bomber detonated explosives strapped to his body in the building where Brigadier Walid Kashmoula worked. Earlier officials said it was a bomb attack.

Al Qaeda's wing in Iraq, led by Jordanian militant Abu Musab al-Zarqawi, said it had assassinated "the apostate Walid Kashmoula, who is the top American agent" in the area.

"This will be the fate of those who stand by the polytheists," al Qaeda Organisation for Holy War in Iraq said in a statement posted on an Islamist website.

Insurgents in Iraq have repeatedly targeted leading police and army officials. Iraqi police and soldiers are also frequent targets of attack by gunmen and suicide bombers.

On Saturday, a roadside bomb killed four policemen in Kirkuk during a funeral for a colleague killed a day earlier.

MOSUL, Iraq - At least 45 people died in violence in Iraq, including a US soldier, as Washington defended its decision to lead an invasion exactly two years ago amid protests around the world.

With talks on a new governing coalition still dragging on seven weeks since landmark January elections, Iraq was plunged into a diplomatic crisis with neighbouring Jordan as the two countries recalled their respective envoys following accusations of a Jordanian's involvement in a deadly suicide bombing.

Insurgents struck around Iraq hitting the fledgling security forces hard at a time when the US government is channelling all its resources into training and equipping them to pave the way for the exit of US-led troops.

In the main northern city of Mosul, a suicide bomber with a fake badge slipped Sunday into a building housing the provincial anti-corruption department and blew himself up inside the office of its chief, General Walid Kachmoula, killing him and two of his guards.

Attackers struck again hours later opening fire on the procession bearing Kachmoula's coffin as it made its way to the cemetery, killing two people and wounding 14, hospital sources said.

Separately, two unidentified bodies shot in the chest and head were found in the city, which has become a new front for the insurgency since November.

In another flashpoint town, gunmen attacked a police station in Baquba killing at least four police and wounding two as a truck bomb rammed into the entrance of an Iraqi army barrack wounding 17 people, a police official said. [...]

In the northern oil centre of Kirkuk, a US soldier was killed and three others wounded when a roadside bomb hit their patrol, the US military said.

Despite the continuing high casualty toll from insurgent violence two years after Washington hailed Iraq's liberation, US Defence Secretary Donald Rumsfeld insisted that major progress had nonetheless been achieved.

"It's a wonderful thing to see 25 million Iraqis liberated, to see their economy improve as it has been, to see their political process move toward democracy," Rumsfeld told Fox News. [...]

Meanwhile, two years after the US-led invasion of Iraq shattered pretence of global agreement on terrorism and security, UN Secretary General Kofi Annan on Sunday asked nations to re-think the rules of going to war.

Annan unveiled a sweeping set of UN reform proposals, including a long-elusive definition of terrorism, and asked the Security Council to fix guidelines on when it could authorise the use of military force.

The secretary general's report was largely driven by the March 2003 invasion, led by the United States without the backing of the council or the support of most of the international community.

In addition to calling the war illegal, Annan repeatedly argued that the divisions between nations had brought the international system of security, embodied by the United Nations since World War II, to a crossroads.

Annan asked the Security Council to "adopt a resolution on the use of force that sets out principles for use" and to commit to abiding by them.

He said the council should reaffirm its "central role" in peace and security, including the use of preventive force in cases of genocide, ethnic cleansing and other crimes against humanity.

While some of the language seemed to be a direct attack on the unpopular US decision to invade Iraq, Annan also asked for a long-elusive and strict definition of terrorism that has been broadly favoured by the United States.

"No cause or grievance, no matter how legitimate, justifies the targeting and deliberate killing of civilians and non-combatants," he wrote in his report, which was to be formally presented to UN member nations on Monday.

The UN secretary general called on nations to define terrorism as any action to kill or harm civilians and non-combatants whose purpose is to "intimidate a population or to compel a government or an international organisation to do or to abstain from doing any act."

Relations between Iraq and its pro-Western neighbour Jordan were meanwhile in crisis as both governments withdrew their envoys following a wave of protests over the alleged involvement of a Jordanian in a deadly suicide bombing.

The first move was made by Jordan, whose Foreign Minister Hani Mulki announced the kingdom was recalling its top diplomat from Baghdad, in a move that threatened to overshadow an Arab summit in Algiers later this week.

Iraq's interim government swiftly retaliated, announcing it was recalling its ambassador from Amman.

"Relations between the two countries are in crisis mode," said an Iraqi official.

The head of Britain's foreign intelligence agency told the Prime Minister, Tony Blair, that the case for war in Iraq was being "fixed" by Washington to suit United States policy, according to a new BBC documentary.

Nine months before hostilities began in March 2003, Richard Dearlove, head of MI6, briefed Mr Blair and a group of ministers on the US's determination to begin the invasion, says the program, which was due to be aired last night.

After attending a briefing in Washington, Mr Dearlove told the meeting that "the facts and intelligence" were being "fixed round the policy" by the Bush Administration.

The allegations against Mr Blair just weeks before an expected general election are likely to reopen a feud between the Government and the BBC. The two fell out last year over allegations by a BBC reporter that Britain "sexed up" the case for war.

The documentary argues that Mr Blair had signed up to follow President George Bush's plans for "regime change" in Iraq as early as April 2002.

Robin Cook, the former foreign secretary who resigned as leader of the House of Commons over the war in Iraq, said that the threat of weapons of mass destruction was not Mr Blair's true reason for going to war.

"What was propelling the Prime Minister was a determination that he would be the closest ally to George Bush and they would prove to the United States Administration that Britain was their closest ally," Mr Cook tells the program.

"His problem is that George Bush's motivation was regime change. It was not disarmament. Tony Blair knew perfectly well what he was doing.

"His problem was that he could not be honest about that with either the British people or Labour MPs, hence the stress on disarmament." [...]

The Pentagon is working to develop a suborbital space capsule within the next five years that would be launched from the United States and could deliver conventional weapons anywhere in the world within two hours, defense officials said.

This year, the Falcon program will test a launcher for its Common Aero Vehicle (CAV), an unmanned maneuverable spacecraft that would travel at five times the speed of sound and could carry 1,000 pounds of munitions, intelligence sensors or other payloads. Among the system's strengths is that commanders could order a CAV -- an unpowered glide vehicle -- not to release its payload if they decided not to follow through with an attack.

The first-generation CAV, expected to be ready by 2010, will have "an incredible capability to provide the warfighter with a global reach capability against high payoff targets," Gen. Lance W. Lord, commander of Air Force Space Command, told the House Armed Services Committee last Wednesday.

Within the next three years, the Falcon program hopes to enter a second stage of the effort: flight-testing two versions of a reusable hypersonic cruise vehicle, sometimes referred to as a space plane, that could travel a suborbital path, about 100,000 feet high, carrying a CAV anywhere in the world. Unlike a missile, the vehicle could return to its base after releasing the CAV to deliver bombs or intelligence sensors.

The Falcon program vehicles "will improve the military's ability to quickly position intelligence, surveillance and reconnaissance payloads, while reducing its reliance on forward and foreign basing," Anthony J. "Tony" Tether, director of the Defense Advanced Research Projects Agency (DARPA), told a Senate Armed Services subcommittee last week.

While most public attention today focuses on meeting threats abroad with traditional land, sea and air forces, the Falcon program reflects how the Bush administration is increasingly looking to space to meet dangers it anticipates. [...]

BANGKOK : At least 14 people including 10 security forces were wounded in two near simultaneous bomb blasts in southern Thailand, rocked by an Islamic separatist insurgency.

The first bomb was detonated at 9:23 am Sunday (0223 GMT) at a park pavilion in the capital of Yala province shortly after policemen searched a group of four young men. The explosion injured seven policemen and the four men, police said.

Seven minutes later in neighbouring Narathiwat province, a bomb exploded outside an army checkpoint in Cho-ai Rong district, wounding three soldiers, including one seriously.

"The bomb was an attack on officials as the area is one where the military gather for work," a police officer told AFP.

At least 630 people have been killed in the predominantly Buddhist kingdom's Muslim-majority south since January 2004 in what authorities have described as a separatist insurgency.

KUALA LUMPUR : Riot police fired teargas at anti-war protestors in the Malaysian capital after they demonstrated outside the US embassy against the US-led invasion of Iraq.

Chanting "Damn George Bush, Damn Tony Blair," some 400 people from the Coalition Against War-Malaysia gathered Sunday outside the embassy in the sweltering heat.

Many carried placards that read "Don't Kill Innocent People", "Stop the Imperialist War", "Get Out Of Iraq" and "No more blood for oil".

Police ordered the crowd to disperse after nearly an hour but protest organisers said teargas was fired at the demonstrators before they were able to move away.

"There were women, children, old people in the crowd. It is a peaceful protest. There was no provocation. Yet they fired water laced with chemicals. They want us to suffer," said S. Arutchelvan, one of the rally's organisers.

"Even when we wanted to disperse, as we were retreating, they shot us (with teargas)," he said.

Mohamad Nasir Hashim, chairman of the opposition Socialist Party of Malaysia, who participated in the march, said: "As far as I am concerned, the police are not professional."

However district police chief Mohamad Noor Masdar told AFP that the demonstration was an "illegal assembly."

"We asked them to disperse but they didn't," he said, adding no arrests were made. [...]

ATLANTA (CNN) - The average price of a gallon of self-serve, regular gasoline shot up nearly 13 cents over the past two weeks, to a record $2.10, a national survey said Sunday.

The price exceeds the previous high of $2.07, which was set last May 21, said Trilby Lundberg, publisher of the Lundberg Survey.

Over the past month, crude oil prices rose 20 cents per gallon, versus a 19-cent rise at the pump, she said.

"Gas has now caught up with that month of oil price hikes," she said.

Even if the price of crude does not rise further, prices at the pump may continue to climb, because of required seasonal reformulations, she said.

March was the deadline for providing gas with a lower sulfur content at the retail level, which adds to the cost of gas.

"The seasonal regulations become tighter and more costly as we move toward summer, and our demand, of course, will be climbing, as it always does," she said.

"Short-term, we'll probably see some further increases at the pump," she said. [...]

Vietnam - A commune in central Vietnam has been severely hit by the bird flu, with 195 patients showing symptoms and two children testing positive with the virus, reported a top provincial official.

Two siblings from the province’s Chau Hoa commune of Quang Binh province had tested positive for the H5N1 strain of bird flu, said Mai Xuan Thu, vice chairman of the provincial People’s Committee on March 20.

The older sister, Hoang Lan Huong, 13, died from the bird flu on March 9, while the brother, Hoang Trong Duong, 5, is in serious condition at the Hue Central Hospital.

Meanwhile, there are 195 other local residents who have shown symptoms of the flu, said Ms. Thu.

It is not yet clear whether these people, some of who had reportedly eaten sick chickens, have the symptoms of the deadly bird flu or the normal flu.

Of the 195 patients showing symptoms, 108 are from Kinh Chau village while the rest live in other villages in Chau Hoa commune.

DHAKA - At least 12 people were killed and more than 200 were injured by a tropical storm that flattened more than 3,000 houses in 15 villages in northern Bangladesh, police said Monday.

"A twister accompanied by a hail storm flattened more than 3,000 houses in Northern Gaibandha district, killing at least 12 (people)" late on Sunday night, district police chief Bhanu Lal Das told AFP.

"The death figures will go up as we cannot start full-scale search operations because of the rough weather," he added.

Winds of about 100 kilometres per hour (62 miles per hour) destroyed crops, uprooted trees and electricity poles, cutting off communications to the 15 villages, in one of the most impoverished parts of the country.

"We suspect more bodies are stuck up in the flattened houses," Das said, adding the hail storm and continuous downpour made search operation difficult.

More than 200 injured people were rushed to different hospitals and clinics in the district, police said.

Tropical storms frequently hit Bangladesh during summer. Before Sunday's storm, at least 20 people had been killed in five tropical storms in different Bangladesh districts since earlier this month.

BUCHAREST - Flooding in central and northern Romania has forced the closing of several national highways leaving more than 400 people stranded Sunday as rescue workers evacuated villages, according to the Romanian environment ministry.

Heavy rain along with melting snow has caused mud slides in the Mures region, the ministry said. Hundreds of homes and thousands of acres of farmland have been inundated by flood waters.

Disaster crews have been evacuating people for two days from the affected villages, according to a Mures official, Cristian Vladu. [...]

South San Francisco, Calif. (AP) -- A rogue funnel cloud raced through South San Francisco Sunday, knocking down power lines and ripping up rooftops.

The whirling cloud - which meteorologists from the National Weather Service believe was a tornado - was spotted at 3:40 p.m. just west of the city. It appeared in the middle of a heavy thunderstorm with blue-black skies and hail. [...]

The twister formed over the Westborough hills and headed over Interstate 280.

After wreaking havoc in an industrial park and residential area close to downtown South San Francisco, it raced northeast and eventually dissipated over San Francisco Bay about 4 p.m. [...]

The funnel cloud touched down about six times, according to witnesses and damage reports.

South San Francisco police desk officer Dave Stahler said the funnel appeared in the middle of a thunderstorm "with really dark skies, tons of rain and lots of hail. It cleared immediately and we got the frantic phone calls."

No injuries were immediately reported. [..]

Meteorologists from the National Weather Service will conduct a storm survey Monday to determine if the funnel was in fact a tornado, which is unusual for the Bay Area. [...]

JAKARTA (AFP): An earthquake measuring 6.0 on the Richter scale jolted the eastern Indonesian island of Alor, causing panic but no reported damage or casualties, meteorologists said Monday.

Residents fled their homes for several hours after the quake, fearing a repeat of the death toll from a quake on the island last year or a tsunami similar to the recent Indian Ocean disaster, police in the town of Kalabahitold AFP.

"People here are still traumatized by the November earthquake. Until now, we have not received any reports of deaths or damages although there were two aftershocks after the big one," police chief Marsudi said.

The tremor took place slightly after midnight and was centered in the Flores Sea some 49 kilometers (30 miles) east of Kalabahi.

At least 27 people died across Kalabahi after an earthquake measuring 6.0 on the Richter scale hit the island near East Timor last November.

Earthquakes are common across the Indonesian archipelago which sits atop the collision point of three continental plates.

BARLOW, Ky. - A small earthquake rumbled through western Kentucky, making some loud booming noises but causing no damage.

The National Earthquake Information Center in Golden, Colo., reported a 2.0 magnitude earthquake Sunday night, centered 2 miles northeast of La Center and 3 miles west of Kevil. It was 3.1 miles deep in the earth.

"There was a blip there just before 6:30 (CST)," said Dan Spaeth, a meteorologist with the National Weather Service in Paducah.

Spaeth said there was no rush of calls that normally flood the service during a tremor. Ballard County dispatcher Brandi Gibson also said there were no calls about the booming sounds.

Magnitude 6.4 - SALTA, ARGENTINA

A strong earthquake occurred at 12:23:52 (UTC) on Monday, March 21, 2005. The magnitude 6.4 event has been located in SALTA, ARGENTINA.

Magnitude 5.8 - SALTA, ARGENTINA

A moderate earthquake occurred at 12:43:11 (UTC) on Monday, March 21, 2005. The magnitude 5.8 event has been located in SALTA, ARGENTINA.