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The extreme rhetoric from the Kremlin’s envoy to NATO came as President Dmitry Medvedev stressed he will make a military response to US missile defence installations in eastern Europe, sending new shudders across countries whose people were once blighted by the Iron Curtain.

And Moscow also emphasised it was closely monitoring what it claims is a build-up of NATO firepower in the Black Sea.

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Top military figure Colonel General Leonid Ivashov, president of the Academy of Geopolitical Studies in Moscow, alleged that the US and NATO had been arming Georgia as a dress rehearsal for a future military operation in Iran.

“We are close to a serious conflict – U.S. and NATO preparations on a strategic scale are ongoing. In the operation the West conducted on Georgian soil against Russia – South Ossetians were the victims or hostages of it – we can see a rehearsal for an attack on Iran.”

With consumer price inflation at 37 percent according to the latest central bank estimate, demand has pushed a kilogram of rat meat up to around 5,000 riel (69 pence) from 1,200 riel last year.

Spicy field rat dishes with garlic thrown in have become particularly popular at a time when beef costs 20,000 riel a kg.

Officials said rats were fleeing to higher ground from flooded areas of the lower Mekong Delta, making it easier for villagers to catch them.

“Many children are happy making some money from selling the animals to the markets, but they keep some for their family,” Ly Marong, an agriculture official, said by telephone from the Koh Thom district on the border with Vietnam.

“Not only are our poor eating it, but there is also demand from Vietnamese living on the border with us.”

He estimated that Cambodia supplied more than a tonne of live rats a day to Vietnam.

The average value of a home fell 10.5 percent to 164,654 pounds ($301,500), the biggest drop since the final quarter of 1990, Nationwide Building Society said today. A gauge of retail sales fell to minus 46 from minus 36 the previous month, the Confederation of British Industry said in a separate report. That’s the lowest since its survey began in July 1983.

Today’s reports indicate Britain is heading for its first recession since the early 1990s after stagnating in the second quarter as higher living costs hurt spending and the credit squeeze ripples through the economy. As the outlook worsens, economists at banks including Societe Generale SA and Bank of America Corp. now forecast the Bank of England will be forced to set aside inflation concerns and cut interest rates this year.

“The big issue is how long and how severe” the U.K.’s recession is going to be, said Jim O’Neill, head of global economic research at Goldman Sachs Group Inc. “We’re in it. It shouldn’t be news anymore.”

U.K. government bonds rose. The yield on the two-year gilt dropped 3 basis points to 4.46 percent at 12:30 p.m. in London.

House prices declined 1.9 percent from a month earlier, the 10th consecutive decline in values, Nationwide said. Meanwhile, retailers’ pessimism deepened to the lowest on record, with the quarterly index of stores’ business situation falling to minus 38 from minus 17 in May, today’s report showed. The CBI survey was conducted between July 29 and Aug. 13.

Brutal Recession

“The CBI figures look even worse that what we saw in the troughs of the last recession, and that was brutal,” said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London.

The intervention designed by the U.S. Treasury Department, Japan’s Finance Ministry and the European Central Bank called for the central banks to purchase dollars and sell euros and yen, with Japan providing the yen needed for the currency swap if the greenback’s value dropped significantly, the news service said.

The three groups, which considered making an emergency statement through the Group of Seven industrial nations, did not stipulate a specific exchange rate for the potential intervention, nor did they detail the amount of money to be used, Nikkei said.

SEC commissioners today approved a “road map” that might allow corporations with market values exceeding $700 million to abandon U.S. accounting standards by 2014. Under the plan, about 110 U.S. companies that are global leaders in their industries may move to international rules as soon as 2010.

“A global set of high-quality accounting standards would be an international language of disclosure, transparency and comparability,” SEC Chairman Christopher Cox said at an open meeting in Washington. “It’s a goal worth pursuing.”

Meshing U.S. regulations with rules adopted by other countries is a priority for the agency, which has said companies will be able to reduce expenses by eliminating duplicate accounting. Investors will benefit because they ultimately bear the burden of higher compliance costs, SEC officials argue.

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At least one study has found companies show higher profits when they follow international standards.

“Gold sales are not a suitable way to sustainably consolidate the public accounts,” the Bundesbank said after a query about trade union proposals that it sell gold to fund some of a 25 billion euro ($37 billion) economic stimulus package.

“National gold reserves have a confidence and stability-building function for the single currency in a monetary union. This function has become even more important given the geopolitical situation and the risks present in financial market developments.”

The Bundesbank is the world’s second-largest holder of gold after the U.S. Federal Reserve, and has sold just 20 tonnes out of total reserves of over 3,000 tonnes in the past five years.

The borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank, the paper said.

The borrowed money would be repaid once the assets of that failed bank are sold.

“I would not rule out the possibility that at some point we may need to tap into (short-term) lines of credit with the Treasury for working capital, not to cover our losses,” Chairman Sheila Bair said in an interview with the paper.

Bair said such a scenario was unlikely in the “near term.” With a rise in the number of troubled banks, the FDIC’s Deposit Insurance Fund used to repay insured deposits at failed banks has been drained.

In a bid to replenish the $45.2 billion fund, Bair had said on Tuesday that the FDIC will consider a plan in October to raise the premium rates banks pay into the fund, a move that will further squeeze the industry.

The agency also plans to charge banks that engage in risky lending practices significantly higher premiums than other U.S. banks, Bair said.

The last time the FDIC had borrowed funds from the Treasury was at nearly the tail end of the savings-and-loan crisis in the early 1990s after thousands of banks were shuttered.

If water is the new oil, T. Boone Pickens is a modern-day John D. Rockefeller. Pickens owns more water than any other individual in the U.S. and is looking to control even more. He hopes to sell the water he already has, some 65 billion gallons a year, to Dallas, transporting it over 250 miles, 11 counties, and about 650 tracts of private property. The electricity generated by an enormous wind farm he is setting up in the Panhandle would also flow along that corridor. As far as Pickens is concerned, he could be selling wind, water, natural gas, or uranium; it’s all a matter of supply and demand. “There are people who will buy the water when they need it. And the people who have the water want to sell it. That’s the blood, guts, and feathers of the thing,” he says.

In the coming decades, as growing numbers of people live in urban areas and climate change makes some regions much more prone to drought, water—or what many are calling “blue gold”—will become an increasingly scarce resource. By 2030 nearly half of the world’s population will inhabit areas with severe water stress, according to the Organization for Economic Cooperation & Development. Pickens understands that. And while Texas is unusually lax in its laws about pumping groundwater, the rush to control water resources is gathering speed around the planet. In Australia, now in the sixth year of a drought, brokers in urban areas are buying up water rights from farmers. Rural residents around the U.S. are trying to sell their land (and water) to multi- national water bottlers like Nestlé (BW—Apr. 14). Companies that use large quantities of the precious resource to run their businesses are seeking to lock up water supplies. One is Royal Dutch Shell, which is buying groundwater rights in Colorado as it prepares to drill for oil in the shale deposits there.

Into this environment comes Pickens, who made a good living for a long time extracting oil and gas and now, at 80, believes the era of fossil fuel is over. So far he has spent $100 million and eight years on his project and still has not found any city in Texas willing to buy his water. But like many others, Pickens believes there’s a fortune to be made in slaking the thirst of a rapidly growing population. If he pumps as much as he can, he could sell about $165 million worth of water to Dallas each year. “The idea that water can be sold for private gain is still considered unconscionable by many,” says James M. Olson, one of America’s preeminent attorneys specializing in water- and land-use law. “But the scarcity of water and the extraordinary profits that can be made may overwhelm ordinary public sensibilities.”

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U.S. crude for October delivery was up $2.98 at $119.25 a barrel after adding $1.16 on Tuesday. London Brent crude gained $2.31 to $116.94 a barrel.

Oil could head towards last week’s near-three-week high of just above $122 a barrel in the next few days depending on Gustav’s path, said Masaki Suematsu, analyst at broker Newedge in Tokyo.

“Gustav is headed right toward the centre of the Gulf of Mexico. Hurricanes taking this route are usually threatening,” he said.

Gustav was downgraded to a tropical storm on Wednesday after it came ashore in Haiti, but forecasters expect wind speeds to regain hurricane force as it crosses over warm waters south of Cuba.