NASA Has No Rocket to Get Astronauts into Space

NASA is Working on the Problem

Russian Rocket Gives NASA a Lift to Space Station
By DAVID M. HERSZENHORN
Published: November 14, 2011 NYT

MOSCOW — A Russian Soyuz rocket blasted off amid heavy snow in Kazakhstan on Monday morning, beginning a two-day trip to ferry three astronauts to the International Space Station and opening a new era of American dependence on Russia — and eventually on commercial enterprises — for space travel.

NASA ended its space shuttle program in July. The launch Monday morning, at 10:14 a.m. from the Baikonur Cosmodrome, carrying an American, Daniel C. Burbank, and two Russians, Anton N. Shkaplerov and Anatoly A. Ivanishin, is the first trip into orbit by astronauts since the last shuttle flight.

The Soyuz TMA-22 is scheduled to dock with the space station on Wednesday, and the three astronauts will join three others who have been on board since June. Those three astronauts are scheduled to return to Earth next week and recent mishaps had raised concerns that the space station would be left empty for the first time in more than a decade.

Monday’s launch, originally scheduled for September, was delayed after the failure in August of a Russian unmanned cargo rocket similar to the one used for manned flights. NASA officials said that they were confident that their Russian counterparts had identified and corrected the problem.

In a separate mishap last week, a Russian craft headed to explore a Martian moon got stalled in low-Earth orbit after its engines failed to fire. The stalled probe, which also launched from the Baikonur cosmodrome, could crash back to Earth within weeks.

On Monday morning, video from the cosmodrome showed the astronauts wearing blue parkas as they headed to board the rocket amid snowflakes swirling in a blustery wind.

The white snowscape around the launch pad briefly glowed bright orange as the countdown hit zero, the boosters fired and the gray rocket quickly accelerated to more than 3,000 miles per hour for a smooth trip into space.

Once safely in orbit, the crew flashed a thumbs up.

Mr. Burbank, a veteran of previous space shuttle flights, will take charge of the space station, and the current commander, Michael Fossum, an American, and flight engineers, Satoshi Furukawa of Japan and Sergei Volkov of Russia, are scheduled to return to Earth on Nov. 22. Another crew of three astronauts are scheduled to travel to the space station on Dec. 21.

In addition to carrying out dozens of scientific experiments, the newly arrived space station team will inaugurate the new era of commercial space expeditions, including the launch of a Falcon 9 rocket, built by Space Exploration Technologies Corporation of Hawthorne, Calif., known as SpaceX, which will carry a capsule called the Dragon.

Another commercial resupply ship being built by Orbital Sciences Corporation of Dulles, Va., is also expected to make the trip to the station next year, according to NASA.

'blaming the Jews and the Jewish state for their enemies’ behavior is what passes for polite conversation among Western elites today.’ - Carloline Glick

With Friends Like These...

By Caroline Glick

The slurs against Prime Minister Binyamin Netanyahu voiced by French President Nicolas Sarkozy and US President Barack Obama after last week’s G20 summit were revealing as well as repugnant.

Thinking no one other than Obama could hear him, Sarkozy attacked Netanyahu, saying, “I can’t stand to see him anymore, he’s a liar.”

Obama responded by whining, “You’re fed up with him, but me, I have to deal with him every day.”

These statements are interesting both for what they say about the two presidents’ characters and for what they say about the way that Israel is perceived by the West more generally.

To understand why this is the case it is necessary to first ask, when has Netanyahu ever lied to Sarkozy and Obama? This week the UN International Atomic Energy Agency’s report about Iran’s nuclear weapons program made clear that Israel – Netanyahu included – has been telling the truth about Iran and its nuclear ambitions all along. In contrast, world leaders have been lying and burying their heads in the sand.

Since Iran’s nuclear weapons program was first revealed to the public in 2004, Israel has provided in-depth intelligence information proving Iran’s malign intentions to the likes of Sarkozy, Obama and the UN. And for seven years, the US government – Obama included – has claimed that it lacked definitive proof of Iran’s intentions.

Obama wasted the first two years of his administration attempting to charm the Iranians out of their nuclear weapons program. He stubbornly ignored the piles of evidence presented to him by Israel that Iran was not interested in cutting a deal.

Perhaps Obama was relying on the US’s 2007 National Intelligence Estimate about Iran’s nuclear weapons program. As Israel said at the time, and as this week’s IAEA report proves, it was the NIE – which claimed that Iran abandoned its nuclear weapons program in 2003 – not Israel that deliberately lied about the status of Iran’s nuclear weapons program. It was the US intelligence community that purposely deceived the American government and people about the gravest immediate threat to US national security.

Israel, including Netanyahu, was telling the truth.

So if Netanyahu never lied about Iran, what might these two major world leaders think he lies about? Why don’t they want to speak with him anymore? Could it be they don’t like the way he is managing their beloved “peace process” with the Palestinians? The fact is that the only times Netanyahu has spoken less than truthfully about the Palestinians were those instances when he sought to appease the likes of Obama and Sarkozy. Only when Netanyahu embraced the false claims of the likes of Obama and Sarkozy that it is possible to reach a peace deal with the Palestinians based on the establishment of an independent Palestinian state west of the Jordan River could it be said that he made false statements.

Because the truth is that Israel never had a chance of achieving peace with the Palestinians.

And the reason this has always been the case has nothing to do with Netanyahu or Israel.

THERE WAS never any chance for peace because the Palestinians have no interest in making peace with Israel. As the West’s favorite Palestinian “moderate,” Fatah leader and Palestinian Authority chairman Mahmoud Abbas said in an interview with Egypt’s Dream TV on October 23, “I’ve said it before and I’ll say it again. I will never recognize the ‘Jewishness’ of the State [of Israel] or a ‘Jewish state.’” That is, Abbas will never make peace with Israel.

Acknowledging this, on Tuesday Netanyahu reportedly told his colleagues that through their recent actions, the Palestinians have abrogated the foundations of the peace process. As he put it, “By boycotting negotiations and by going instead to the United Nations [to achieve independent statehood], they [the Palestinians] have reneged on a central tenet of Oslo.”

That tenet, which formed the basis of the Oslo peace process, was “land for peace.”

As Netanyahu explained, Israel gave up land within the framework of the Oslo Accords. In exchange the Palestinians committed to resolve their conflict with Israel through direct negotiations that would lead to peace. Their UN gambit, like Abbas’s statement to Egyptian television, shows that the Palestinians – not Israel – have been lying all along. They pocketed Israel’s territorial concessions and refused to make peace.

So why do the likes of Sarkozy and Obama hate Netanyahu? Why is he “a liar?” Why don’t they pour out their venom on Abbas, who really does lie to them on a regular basis? The answer is because they prefer to blame Israel rather than acknowledge that their positive assessments of the Palestinians are nothing more than fantasy.

And they are not alone. The Western preference for fantasy over reality was given explicit expression by former US president Bill Clinton in September.

In an ugly diatribe against Netanyahu at his Clinton Global Initiative Conference, Clinton insisted that the PA under Abbas was “pro-peace” and that the only real obstacle to a deal was Netanyahu. Ironically, at the same time Clinton was attacking Israel’s leader for killing the peace process, Abbas was at the UN asking the Security Council to accept as a full member an independent Palestine in a de facto state of war with Israel.

So, too, while Clinton was blaming him for the failure of the peace process, Netanyahu was at the UN using his speech to the General Assembly to issue yet another plea to Abbas to renew peace talks with Israel.

Clinton didn’t exhaust his ammunition on Netanyahu. He saved plenty for the Israeli people as well. Ignoring the inconvenient fact that the Palestinians freely elected Hamas to lead them, Clinton provided his audience with a bigoted taxonomy of the Israeli public through which he differentiated the good, “pro-peace Israelis,” from the bad, “anti-peace,” Israelis.

As he put it, “The most pro-peace Israelis are the Arabs; second the Sabras, the Jewish Israelis that were born there; third, the Ashkenazis of longstanding, the European Jews who came there around the time of Israel’s founding.”

As for the bad Israelis, in the view of the former president, “The most anti-peace are the ultra-religious who believe they’re supposed to keep Judea and Samaria, and the settler groups, and what you might call the territorialists, the people who just showed up lately and they’re not encumbered by the historical record.”

BY RANKING the worthiness of Israel’s citizens in accordance with whether or not they agree with Clinton and his friends, Clinton was acting in line with what has emerged as standard operating practice of Israel’s “friends” in places such as Europe and the US. Like Clinton, they too think it is their right to pick and choose which Israelis are acceptable and which are unworthy.

On Wednesday we saw this practice put into play by British Ambassador Matthew Gould. This week the Knesset began deliberations on a bill that would prohibit foreign governments and international agencies from contributing more than NIS 20,000 to Israeli nongovernmental organizations. The bill was introduced by Likud MK Ofir Okunis with Netanyahu’s support.

According to Haaretz, Gould issued a thinly veiled threat to Okunis related to the bill. Gould reportedly said that if the bill is passed, it would reflect badly on Israel in the international community.

Last month, Makor Rishon published a British government document titled, “NGOs in the Middle East Funded by the Foreign and Commonwealth Office.”

The document showed that in 2010, outside of Iraq, the British government gave a total of £100,000 to pro-democracy NGOs throughout the Arab world.

In contrast to Britain’s miserly attitude towards Arab civil society organizations, Her Majesty’s Government gave more than £600,000 pounds to farleftist Israeli NGOs. These Israeli groups included the Economic Cooperation Foundation, Yesh Din, Peace Now, Ir Amim and Gisha. All of these groups are far beyond Israeli mainstream opinion.

All seek to use international pressure on Israel to force the government to adopt policies rejected by the vast majority of the public.

So for every pound Britain forked out to cultivate democracy in 20 Arab non-democracies, it spent £6 to undermine democracy in Israel – the region’s only democracy.

And the British couldn’t be more pleased with the return on their investment. Speaking to Parliament last year, Britain’s Minister of Middle East Affairs Alistair Burt said the money has successfully changed Israeli policies. As he put it, “Since we began supporting these programs some significant changes have been made in the Israeli justice system, both civilian and military, and in the decisions they make. They have also raised a significant debate about these matters and we believe these activities will strengthen democracy in Israel.”

In other words, as far as Britain is concerned, “strengthening democracy” in Israel means tipping the scales in favor of marginal groups with no noticeable domestic constituency.

These shockingly hostile statements echo one made by then-presidential candidate Obama from the campaign trail in February 2008. At the time Obama said, “I think there is a strain within the pro-Israel community that says unless you adopt a[n] unwavering pro-Likud approach to Israel that you’re anti-Israel, and that can’t be the measure of our friendship with Israel.”

Scarcely a day goes by when some foreign leader, commentator or activist doesn’t say that being pro-Israel doesn’t mean being pro-Israeli government. And like Obama’s campaign-trail statement, Clinton’s diatribe, Sarkozy and Obama’s vile gossip about Netanyahu and Britain’s self-congratulatory declarations and veiled threats, those who make a distinction between the Israeli people and the Israeli government ignore two important facts.

First, Israel is a democracy. Its governments reflect the will of the Israeli people and therefore, are inseparable from the people. If you harbor contempt for Israel’s elected leaders, then by definition you harbor contempt for the Israeli public.

And this makes you anti-Israel.

The second fact these statements ignore is that Israel is the US’s and Europe’s stalwart ally. If Sarkozy and Obama had said what they said about Netanyahu in a conversation about German Chancellor Angela Merkel, or if Netanyahu had made similar statements about Obama or Sarkozy, the revelation of the statements would have sparked international outcries of indignation and been roundly condemned from all quarters.

And this brings us to the other troubling aspect of Sarkozy and Obama’s nasty exchange about Netanyahu. Their views reflect a wider anti-Israel climate. 

Outside the Jewish world, Sarkozy’s and Obama’s hateful, false statements about their ally provoked no outrage. Indeed, it took the media three days to even report their conversation. This indicates that Obama and Sarkozy aren’t alone in holding Israel to a double standard. They aren’t the only ones blaming Israel for the Palestinians’ bad behavior.

The Western media also holds Israel to a separate standard. Like Obama and Sarkozy, the media blame Israel and its elected leaders for the Palestinians’ duplicity. Like Obama and Sarkozy, the media blame Israel for failing to make their peace fantasies come true.

And that is the real message of the Obama- Sarkozy exchange last week. Through it we learn that blaming the Jews and the Jewish state for their enemies’ behavior is what passes for polite conversation among Western elites today. 

caroline@carolineglick.com

NITTANY LYIN'

Sexual Predator Jerry Sandusky and his Keeper Joe Paterno

Penn State: the indictment against Jerry Sandusky

Jerry Sandusky was arrested on 5 November after a grand jury indicted the former Penn State defensive co-ordinator on sexual abuse charges. Read the indictment here

• Penn State students protest against Joe Paterno dismissal

The Indictment

What is Happening in the Forbidden Iran? (Letters from Iran)

Iran explosion at Tehran military base

A huge explosion has rocked a military base west of Iran's capital, Tehran, officials say.

Several people were killed after the blast inside a Revolutionary Guards weapons depot, according to the semi-official Fars news agency, but this has not been confirmed.

Windows in nearby buildings have been shattered and the blast was heard in central Tehran, 40 km (25 miles) away.

A helicopter and ambulances have reportedly been sent to the scene.

Local MP Hossein Garousi said "a large part of an ammunition depot exploded," parliament's website reported.

It is not clear what caused the explosion in the village of Bidganeh, near the city of Karaj.

Here is a guy who wants a to flip Taiwan in exchange for Chinese forgiveness of US debt.

OP-ED CONTRIBUTOR
To Save Our Economy, Ditch Taiwan
By PAUL V. KANE NY Times
Published: November 10, 2011

WITH a single bold act, President Obama could correct the country’s course, help assure his re-election, and preserve our children’s future.

He needs to redefine America’s mindset about national security away from the old defense mentality that American power derives predominantly from our military might, rather than from the strength, agility and competitiveness of our economy. He should make it clear that today American jobs and wealth matter more than military prowess.

As Adm. Mike Mullen, then chairman of the Joint Chiefs of Staff, declared last year, “The most significant threat to our national security is our debt.”

There are dozens of initiatives President Obama could undertake to strengthen our economic security. Here is one: He should enter into closed-door negotiations with Chinese leaders to write off the $1.14 trillion of American debt currently held by China in exchange for a deal to end American military assistance and arms sales to Taiwan and terminate the current United States-Taiwan defense arrangement by 2015.

This would be a most precious prize to the cautious men in Beijing, one they would give dearly to achieve. After all, our relationship with Taiwan, as revised in 1979, is a vestige of the cold war.

Today, America has little strategic interest in Taiwan, which is gradually integrating with China economically by investing in and forming joint ventures with mainland Chinese firms. The island’s absorption into mainland China is inevitable.

But the status quo is dangerous; if Taiwanese nationalist politicians decided to declare independence or if Beijing’s hawks tired of waiting for integration and moved to take Taiwan by force, America could suddenly be drawn into a multitrillion-dollar war.

There will be “China hawks” who denounce any deal on Taiwan as American capitulation, but their fear of a Red China menacing Asia is anachronistic. Portraying the United States as a democratic Athens threatened by China’s autocratic Sparta makes for sensational imagery, but nothing could be further from reality.

The battle today is between competing balance sheets, and it is fought in board rooms; it is not a geopolitical struggle to militarily or ideologically “dominate” the Pacific.

In fact, China and the United States have interlocking economic interests. China’s greatest military asset is actually the United States Navy, which keeps the sea lanes safe for China’s resources and products to flow freely.

China would want a deal on Taiwan for several reasons. First, Taiwan is Beijing’s unspoken but hard-to-hide top priority for symbolic and strategic reasons; only access to water and energy mean more to Chinese leaders.

Second, a deal would open a clearer path for the gradual, orderly integration of Taiwan into China.

Third, it would undermine hard-line militarists who use the Taiwan issue to stoke nationalist flames, sideline pro-Western technocrats and extract larger military budgets. And finally, it would save China the considerable sums it has been spending on a vast military buildup.

Jeffrey Lewis, an East Asia expert at the Monterey Institute of International Studies, estimated that one-fourth to one-third of China’s defense spending goes to forces in the vicinity of Taiwan — at a cost of $30 billion to $50 billion a year. A deal for the resolution of Taiwan’s status could save China $500 billion in defense spending by 2020 and allow Beijing to break even by 2030, while reducing America’s debt and serving our broader economic interests.

The Chinese leadership would be startled — for a change — if the United States were to adopt such a savvy negotiating posture. Beyond reducing our debt, a Taiwan deal could pressure Beijing to end its political and economic support for pariah states like Iran, North Korea and Syria and to exert a moderating influence over an unstable Pakistan. It would be a game changer.

The deal would eliminate almost 10 percent of our national debt without raising taxes or cutting spending; it would redirect American foreign policy away from dated cold-war-era entanglements and toward our contemporary economic and strategic interests; and it would eliminate the risk of involvement in a costly war with China.

Critics will call this proposal impractical, even absurd. They will say it doesn’t have a prayer of passing Congress, and doesn’t acknowledge political realities. They might be right — today.

But by pursuing this agenda, Mr. Obama would change the calculus and political reality. And Congress should see a deal with China as an opportunity to make itself credible again.

Debt is not in itself bad, when managed, but today’s unsustainable debt will suffocate our economy, our democracy and our children’s futures.

By tackling the issue of Taiwan, Mr. Obama could address much of what ails him today, sending a message of bold foreign policy thinking and fiscal responsibility that would benefit every citizen and be understood by every voter.

Paul V. Kane, a former international security fellow at the Harvard Kennedy School, is a Marine who served in Iraq.

The making of a Veteran - Uptight at Khe Sanh

Shovel Ready, Job Creating Energy Oroject Must Wait Until After Obama’s Relelection Quest

U.S. (Obama Re-election Campaign)  Delays Pipeline Decision.


WSJ 

WASHINGTON—The Obama administration said Thursday it would seek to reroute a portion of a proposed Canada-U.S. oil pipeline, postponing until after the 2012 election a decision on an issue that has divided the Democratic Party's environmental and union supporters.

While the Keystone XL pipeline could still be built in 2013 or later, environmentalists called the delay a clear victory. Industry and labor groups, which argue the pipeline would create thousands of jobs and allow the U.S. to increase its imports of oil from a friendly neighbor, issued swift denunciations.

The decision highlighted President Barack Obama's difficult choices on environmental issues as he heads into an election where he has little margin for error. Republicans and the oil industry say his policies are hindering economic growth, while enthusiasm for the president among environmentalists waned after he put off tighter curbs on smog-forming emissions.

Mr. Obama said a delay was needed to ensure environmental concerns were adequately addressed. "Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood," he said in a statement.

The decision could reshape the North American energy industry, given the project's importance for Canadian oil producers looking to the U.S. market and for refiners that have spent billions of dollars to handle the influx of heavy Alberta crude, one of the world's most promising sources of fuel. Canadian officials and oil-industry executives have recently hinted they would go elsewhere to sell their oil.

Terry O'Sullivan, general president of the Laborers' International Union of North America, said the move would "inflict a potentially fatal delay to a project that is not just a pipeline, but is a lifeline for thousands of desperate working men and women. The administration chose to support environmentalists over jobs—job-killers win, American workers lose."

"This is clearly about politics and keeping a radical constituency opposed to any and all oil and gas development in the president's camp for 2012," said Jack Gerard, director of the American Petroleum Institute.

A State Department official, Kerri-Ann Jones, said, "This is not a political decision." The White House didn't tell the department how to decide, she said.

Environmental groups praised the delay and called on the administration to reject the pipeline outright. "It doesn't make sense for America to be building infrastructure for dirty oil for the next five decades," said Susan Casey-Lefkowitz, a director with the Natural Resources Defense Council.

TransCanada Corp., the company which has applied for a permit to build the pipeline, said it believed the project would ultimately be approved. "If Keystone XL dies, Americans will still wake up the next morning and continue to import 10 million barrels of oil from repressive nations, without the benefit of thousands of jobs and long-term energy security," said Chief Executive Russ Girling.

The move is something of an about-face for the administration, which had said it would make a decision on the 1,700-mile pipeline by the end of the year. Just as it seemed headed toward green-lighting the project, a firestorm of protest emerged, with environmental groups and concerned citizens protesting at rallies and public hearings. On Sunday, thousands of protesters formed a human chain around the White House. The outcry surprised the White House, which hadn't expected the pipeline to become such a flashpoint, administration officials said.

On Thursday, State said it would seek an alternative route for a small portion of the pipeline that runs through an environmentally sensitive part of Nebraska known as the Sand Hills. That will require a new environmental review that will take until at least the first quarter of 2013, the department said.

Department officials said the decision was influenced by recent public hearings in Nebraska, where ranchers, farmers and others pleaded with the administration to avoid the Sand Hills area, which sits atop an aquifer supplying fresh water to Nebraska and other states.

The State Department had previously considered alternative routes to bypass the Sand Hills but concluded they were either economically or environmentally impractical. Ms. Jones said the new analysis would look only at alternative routes that bypass the Sand Hills but remain within Nebraska.

Canadian government spokesman Andrew MacDougall said the country was disappointed with the U.S. decision to delay approval but "we remain hopeful the project will be decided on its merits and eventually approved."

Today, the Germans and French are Talking About Breakup of Euro

European debt crisis spiralling out of control

Reports that Germany and France have begun talks to break up the eurozone amid fears that Italy will be too big to rescue

GUARDIAN

Fears that Europe's sovereign debt crisis was spiralling out of control have intensified as political chaos in Athens and Rome, and looming recession, created panic on world markets.

Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy would be too big to rescue.

Despite Silvio Berlusconi's announcement that he would step down as prime minister once austerity measures were pushed through parliament, a collapse of investor confidence in the eurozone's third-biggest economy sent interest rates in Italy to the levels that triggered bailouts in Portugal, Greece and Ireland.

Italian bond yields surged through the critical 7% mark, at one point hitting 7.5%, amid concern that the deteriorating situation had moved the crisis into a dangerous new phase.

In Athens talks to appoint a prime minister to succeed George Papandreou were in deadlock, and will resume on Thursday morning. The Italian president, Giorgio Napolitano, sought to reassure the markets by promising that Berlusconi would be leaving office soon.

Angela Merkel, the German chancellor, said the situation had become "unpleasant", and called for eurozone members to accelerate plans for closer political integration. "It is time for a breakthrough to a new Europe," she said. "Because the world is changing so much, we must be prepared to answer the challenges. That will mean more Europe, not less Europe."

The president of the European commission, José Manuel Barroso, issued a new call for the EU to "unite or face irrelevance" in the face of the mounting economic crisis in Italy. "We are witnessing fundamental changes to the economic and geopolitical order that have convinced me that Europe needs to advance now together or risk fragmentation. Europe must either transform itself or it will decline. We are in a defining moment where we either unite or face irrelevance," he said.

Senior policymakers in Paris, Berlin and Brussels are reported to have discussed the possibility of one or more countries leaving the eurozone, while the remaining core pushes on toward deeper economic integration, including on tax and fiscal policy. "France and Germany have had intense consultations on this issue over the last months, at all levels," a senior EU official in Brussels told Reuters, speaking on condition of anonymity because of the sensitivity of the discussions.

Financial regulators across Europe were last night carefully monitoring the health of their heavily exposed banks, amid concern that the turmoil could lead to a debt default, or even the break-up of the euro.

George Osborne, just three weeks away from delivering his autumn statement on the health of the economy, believes Europe's problems are blighting the UK's growth prospects, but he will use the sell-off of Italian bonds to insist there is no alternative to his austerity plans.

Nick Clegg, the deputy prime minister, spent Wednesday in Brussels urging the council president, Herman Van Rompuy, and a clutch of EU commissioners to focus on growth, and not further treaty changes, warning that if Europe does not become more competitive it will end up in a spiral of perpetual decline. Both he and David Cameron are urging EU integrationists to recognise that EU Treaty changes in the next few months would be a massive distraction and no cure for the underlying economic crisis. He pointed out that they would require referendums in at least four countries.

The latest chapter in the ongoing sovereign debt crisis came as Bank of England policymakers gathered for their monthly two-day interest rate-setting meeting. The monetary policy committee announced £75bn-worth of quantitative easing last month in an effort to prevent a recession.

City analysts believe the renewed turmoil in the eurozone is pointing to a deep recession in Europe. "It's unavoidable that there will be an outright contraction in the fourth quarter of this year, and a 60%-70% chance of another decline in the first quarter of next year," said Nick Parsons, head of strategy at National Australia Bank.

Shares fell heavily on both sides of the Atlantic. The Italian stock market lost 4% of its value. The FTSE100 index of leading shares closed 106.96 points down, at 5460.38. The Dow Jones closed 389 points down at 11,780.94.

Christine Lagarde, head of the IMF, told a financial forum in Beijing that Europe's debt crisis risked plunging the global economy into a Japan-style "lost decade" of weak growth and deflation.

"Our sense is that if we do not act boldly and if we do not act together, the economy around the world runs the risk of a downward spiral of uncertainty, financial instability and potential collapse of global demand … we could run the risk of what some commentators are already calling the lost decade."

Simon Derrick, currency strategist at BNY Mellon, said: "We're at the point of asking the question, if I put my money into Italy, am I going to get it back? The fact is, there isn't a safety net." He added that the mood in the City was reminiscent of Black Wednesday, in September 1992, when the UK crashed out of the European Exchange Rate Mechanism.

The surge in Italian bond yields was eventually capped by the European Central Bank, which intervened in the markets to buy limited quantities of Italian debt. But analysts say the ECB will eventually have to step up its action, and act as a lender of last resort to bring interest rates down to pre-crisis levels. Sony Kapoor, director of Brussels-based think-tank Re-Define, said: "We may be fairly close to the point where an existential threat to the eurozone, and hence the ECB, is on the horizon. This could easily spiral out of control."

The ECB is seen as the only institution with the firepower to rescue Italy, because the EU lacks the resources to bail out such a large economy. Ben May, of Capital Economics, said Italy would need a €650bn bailout to keep it out of financial markets for the next three years or so. "The European Financial Stability Facility will not be able to provide a bailout of this size," he said.

Officials in Brussels insisted on Wednesday there would be no rescue package for Rome, saying, "financial assistance is not on the cards". A key test will come on Thursday morning when Italy has to raise €5bn from investors on the bond market.

Economic and monetary affairs commissioner Olli Rehn ratcheted up the political pressure on Italy with a strongly-worded letter to finance minister Giulio Tremonti. In it, Rehn demanded concrete written details of how Italy will implement each of the 39 separate reform measures it has promised to undertake.

In Rome the head of state, Giorgio Napolitano, insisted that Berlusconi would be leaving office soon, and that his departure would not be the prelude to a lengthy period of political instability.

His intervention came after hurried consultations with the speakers of both houses of parliament to ensure the speediest possible approval for a package of economic reform and austerity measures agreed with the European institutions. On Tuesday evening, after losing his majority in the chamber of deputies, Berlusconi told Napolitano he would resign.

But, to prevent the economic measures being blocked by the fall of his government, he said he would only go once the package had been approved.

As concern grew that he might delay the passage of the legislation, which has become a litmus test of Italy's credibility in the markets, Berlusconi said he would insist on holding new elections and one of his ministers speculated that could be next February.

After the yield on Italy's benchmark bonds soared above 7%, taking interest rates to a level beyond which previous euro zone debt crisis victims have sought a bail-out, the president issued a statement to say the new economic measures would be "approved in the space of a few days" and that there was "no uncertainty over the prime minister's decision to resign".

Napolitano, who cannot begin consultations with party leaders until Berlusconi leaves office, said that either a new government would be formed "to take every necessary decision" or an election would be held "within the shortest time".

That would still mean a vote was not held until January. But a source close to the president stressed to the Guardian that "early elections are not a foregone conclusion."