Gold likely to hit new highs on dollar fear

Gold is likely to hit new record highs, spurred by serious concern about the U.S. currency and doubt about the state of the world economy, the chairman of Barrick Gold Corp. said on Thursday.

There was even a possibility, although not a probability, central banks, including China’s, might start to switch from dollar holdings to gold, which could cause the metal’s price to treble or more.

From a gold producers’ perspective, one negative is that the cost of bringing on production has remained high, even as other raw materials, including base metals and energy, have slumped.

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Obama’s New Deal to Exclude White Males

Government Regulators Aided IndyMac Cover-Up, Maybe Others

A brewing fraud scandal at the Treasury Department may be worse than officials originally thought.

Investigators probing how Treasury regulators allowed a bank to falsify financial records hiding its ill health have found at least three other instances of similar apparent fraud, sources tell ABC News.

In at least one instance, investigators say, banking regulators actually approached the bank with the suggestion of falsifying deposit dates to satisfy banking rules — even if it disguised the bank’s health to the public.

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Change Can Happen?

Monetary union has left half of Europe trapped in depression

Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch.

Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and €73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state.

A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece’s social fabric is unravelling before the pain begins, which bodes ill.

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World Demand Collapse, Bonds Next

Anyone following the economic news in recent months has to be stunned at the declining economic activity. Japan had a 16% drop in machine orders for November. US car sales down 30 to 40%. Even world car leader Toyota has sales down 20 to 30%. Worldwide car sales are way down too, anywhere from 10 to 20% depending on which area.

US retail sales are down 2 plus percent, but depending on what stats you look at, autos -30% plus, that 2% number is far worse than it looks.

The EU region is seeing marked declines in orders and exports. Japan had a stunning 15 to 17 % drop in exports from the previous year. China had over 100,000 factories close by end of 08. The list is endless.

Of course all this collapsing demand is hitting commodities and energy. Gold has fared better overall, but is torn between central bank inflation efforts and deflation in general in every major economy. Even China is said to see possible flat growth in 09, something that they consider akin to Armageddon, as they need 15 million new jobs each year just to stay even with population growth.

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Hamas Tunnel System Rivals Viet Cong’s Cu Chi Underground

A massive tunnel system running from Gaza to the Egyptian border has long served Palestinians as a supply line for everything from livestock and construction materials to stocks of medicine and smuggled electronics equipment. But now, as war rages in the area, the tunnels have become the main route for providing the Hamas terror group with the weapons it needs to fight against Israel.

Dismantling the tunnels in Gaza is a key to winning the war for Israel, which has sworn to eradicate them. But military experts and historians say destroying them will be virtually impossible.

The tunnel system is strikingly similar to the Viet Cong’s infamous Cu Chi tunnels during the Vietnam War. The Viet Cong moved weapons and supplies through their tunnels, and, like Hamas, they hid their top leaders in them as well.

The Viet Cong — a technological underdog to the United States — was able to bridge the firepower gap against a world superpower through sheer cunning and ingenuity. The Cu Chi tunnels were a vast network of underground sleeping quarters, weapon storage facilities, war rooms and fighting positions. Guerrillas dug out makeshift medical facilities beneath the earth, and doctors tended to wounded soldiers in them, often using electricity generated by a bicycle.

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