Below is the second half of an article that continues from the 'Barrick Rant' on gold production.   It talks about the number of countries decoupling from the US dollar and the pressure that is putting on gold prices.  I especially like the last three parapgraphs where Ian Cockerill of Gold Fields talks about how the industry has deluded itself by talking about cash cost per ounce verse total cost per ounce.  

If you go to the source listed below you have to read about halfway down to get to the part pated below.

Source: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/11/15/bcngold115.xml
Updated Nov 16, 2007

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"............. Gold reached a 27-year high of $846 an ounce in early November following rate cuts by the US Federal Reserve, though it has fallen back on profit taking.

Investors seem to be betting on a "Bernanke reflation", suspecting that the Fed will turn the liquidity tap back on to cushion the US property slump.

Tony Fell, chairman of RBC Capital Markets, said the world money supply has been growing by 5pc-10pc while the stock of mined gold has been rising at 1.6pc, creating a mismatch that must be covered.

Mr Fell says the total debt burden in the US has exploded to 340pc of GDP, in stark contrast to the steady levels of around 150pc of the post-War era.

It almost insures further dollar debasement. "We're in the very early phases of a prolonged bull market," he said.

RBC argues that the global dollar system known as Bretton Woods II is "coming apart at the seams" as Asian, Mid-East, and Latin American states start to break their dollar links to avoid importing US inflation.

The result is to resurrect gold, which is fast regaining its role as the world's benchmark currency.

It was the last currency bust-up -- caused by America's attempt to the fight the Vietnam War and fund the Great Society, without adequate taxes -- that lay behind the 1970s bull market in gold.

"The fact that monetary policy in the core was too loose for the periphery triggered the demise of Bretton Woods 1. The late 1960s saw first France and then Germany and Britain all start to swap their dollar reserves for gold. We may well be witnessing a similar situation today as price pressures build in the emerging world," it said in a new report.

However, the bank warned that gold was looking toppy after the blistering Autumn rally and faced a likely sell-off in coming weeks, perhaps to $725-$750.

India's gold buying season is coming to an end with the Diwali Festival. The country accounts for 22pc of world gold demand.

The level of speculative "long" positions on New York's Comex futures market has remained above 20m ounces for five weeks in a row. This sort of pattern is typically followed by a sharp slide, although the global credit crunch and bank scares may change the game this time.

RBC says any correction is likely to be short, with gold probing record highs of $900 an ounce early next year.

Whether the gold mining shares will at last join the party is far from clear. Many have languished through the bull market, and some are trading well below levels reached when gold was half the price.

Costs are rising at $60 an ounce annually. They will average of $460 by next year. From tires, to diesel fuel, and the geologists' salaries, mine inflation is running at 15pc.

Ian Cockerill, head of Gold Fields, said the industry had "shot itself in the foot" by touting production cash costs that were not even close to the real figure.

Hence the fury of shareholders left trying to understand how so many mines could have gone bust when alleged costs per ounce were half the spot price of gold.

"We've deluded ourselves and we've deluded investors by failing telling them about all the other bills we have to pay. Until we tell them the total cost per ounce, we'll never have credibility," he said.
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