The insanity on Wall Street sent investors fleeing to safe-haven investments such as gold, which has benefited overall from the market’s volatility.

After meltdowns in banking, housing and commodities gold became the investment of choice because of its intrinsic stability compared with fiat currency. But what many investors may not know is that the decline in gold production over the past few years is expected to continue, potentially propping up gold prices for years to come.

In November 2008, the South African government said its gold production dropped by 8.7% compared with same month a year earlier.

As the world’s second largest gold producer behind China, the November drop in production remains indicative of the long-term energy and labor problems that show no sign of abating.

The crisis knocked South Africa out of the number-one gold producer spot in 2007, which it held for more than a century, when it was overtaken by China. Without a steady source of electricity, it’s unlikely that South Africa will be able to reclaim its crown.

South Africa’s public electricity company Eskom operates a feeble infrastructure unable to keep up with demand. Power failures have caused South African mines to shut down for days.  The power crisis is expected to persist at least until 2012.

Compounding South Africa’s dilemma is that experts believe all the easy gold has already been mined – meaning that the producers have to dig to record depths. While this certainly increases the cost of doing businesses, deeper mining means more power requirements.

The downward trend in South Africa’s output saw a 15% decline in production last year alone.

Supply has now tumbled by more than 75% from the all-time peak of 1,000 tonnes mined in 1970, when South Africa supplied 80% of the world’s gold.

Yes, gold is always subject to fluctuations, but the long-term prospects make it almost a sure winner.

In one of the stealth oil developments this year, Cuban officials said last week that the Communist country is embarking on an aggressive exploratory drilling program to assess the potential offshore reserves.

Cuba has been relying on companies from China, Central America and the Middle-East for years now to pump crude from offshore rigs. This latest effort, 20 miles north of Havana, represents a new surge in drilling that could start as early as the second quarter in the Gulf of Mexico.

The biggest winner here for investors could be Repsol YSF. S.A. (NYSE: REP), the oil major based in Madrid, Spain. Repsol will lead a consortium of drillers that includes India’s state-run Oil & Natural Gas Co. and Norway’s StatoilHydro. Additional exploratory drilling in the region of the Gulf under Cuba’s economic control is anticipated in 2010 and 2011.

Repsol has been drilling in cooperation with Cuba for at least the past five years. While some skeptics believe that the estimated 20-billion barrels of recoverable oil could be too deep to justify production, Repsol has extensive experience in deep-water drilling.

If the news is good here, it could be the impetus that the stock needs to recover – putting investors in a position to pocket some gains.

Reposol currently trades on the NYSE at about $18, near the bottom of its 52-week range of $16.04 – $44.85.

The company has a market cap of $22.48 billion. Along with its subsidiaries, Reposol is involved in the exploration, development and transportation of oil, natural gas and liquefied natural gas. Its main markets include Spain, Argentina, Brazil, and Bolivia. As of December 31, 2007, it had 951,578 thousands of barrels of crude oil; and 8,156,157 millions of cubic feet of gas, as well as 6,514 service stations.

Repsol has made a significant new oil find in the deepwater area of the U.S waters of the Gulf of Mexico. Other recent discoveries include new gas discoveries in Peru and Algeria, and oil in the deep waters of Brazil’s massive Santos Basin.

Reposol could have been dragged down by low crude prices versus any fundamental flaws in its operation. A top-line look at Reposol’s numbers indicate an upward trend in revenues.

On November 13, 2008, the company posted net income of $3.63 billion in the first nine months of 2008, a 15% rise on the year-earlier period.

Repsol ‘s operating profit, a measure of the company’s ordinary business, reached $6.54 billion, a rise of 18.9% year-on-year.

Profits across its major business units rose in most of its major business units. For example, its LNG unit saw a rise of 20.5% during the period over the previous year.

At the same time, Repsol agreed to pay a gross dividend of $1.29 per share from 2007 earnings, a raise of 39% from the previous year.

With these results, Repsol could prove to be the sleeper oil play of 2009. Oil prices continue to bump along the bottom and worldwide consumption of fuel will probably stay flat. Still, it appears that Repsol has hit bottom and is the way to long, slow climb upwards.

The study pits hard economics against White House politics and feel-good special-interest groups. The new evidence begins to show that even the most starry-eyed optimists of the green movement may not be the best friends of individual investors looking for speculative returns in alternative energy.

Articles in the Wall Street Journal and elsewhere have recently begun to call attention to the elephant in the room: that today’s state of economics simply don’t make sense for a major renewable-energy push in America. Low oil prices, tight credit and the highest unemployment in decades have conspired to make renewable energy a losing proposition.

Investors who believe otherwise may soon find themselves in the red.

Massive blackouts in the East Cost over the past decade certainly provide evidence for a grid overhaul. But to do it in the name of a greener America presents investors with a misleading business case for the investment.

The study was sponsored by the most powerful players in the electricity industry, including the Tennessee Valley Authority, PJM Interconnection LLC, Midwest Independent System Operator, Mid-Continent Area Power Pool, the SERC Reliability Region and the Southwest Power Pool. It was funded to probe the financial challenges of weaning America off fossil-fuel power plants.

The results are especially pertinent as the Obama administration sets a mandate of sourcing 20% of the country’s electricity through renew energy by 2024. In 2007, the U.S. drew about 7% of its electricity from renewables, according to the Energy Information Administration.

As a result of Washington’s green-mania, headlines have been luring investors into alternative energy. The new report underscores the importance of due diligence in making forays into this type of investments where profits are driven more by hype than by real returns.

The report concludes that the revamped national grid would cost up to $100 billion. On top of that, an additional $720 billion would be required for wind turbines to meet the guidelines of the Obama administration. The overhaul could take at least 15 years, doing little if anything at all to fulfill the mission rebuilding the current wrecked economy.

The Wall Street Journal article reported that the $100 billion would fire the opening shot of a political and legal battle that could stall the massive project indefinitely. “Getting the high-voltage power lines build across the country would require the assent of local authorities and landowners, and might require federal intervention.”

In short, it would constitute a full-employment act for lawyers at almost every level. Since most wind and solar installations are in remote locations, the installation of high-voltage, intelligent transmission lines into the closest grid would fire up landowners and environmentalists look to protect their land and the endangered species affected by the construction.

Once again, investors should be cautious about get-rich-quick schemes in alternative energy. To reiterate our position, renewable energy could one day turn ordinary investors into millionaires. We’re just not sure we’ll live long enough to see it.

We’ve been cautioning readers against expecting any near-term returns in China under the current economic malaise. With unemployment at record highs, a 100-year drought crippling agriculture and exports at a mere trickle, China is not the place to be right now.

But looking out on the horizon, we wonder if China should be your primary investment destination for potential long-term returns.

Car data for January 2009 certainly suggests a strong bias toward China.

The China Association of Automobile Manufacturers said Tuesday that 735,000 vehicles were sold in China in January. That surpassed the 656,976 vehicles sold in the U.S. the same month.

While car sales slowed in China along with most other countries, U.S. sales plunged 37% in January to a 26-year low. Meanwhile, vehicle sales in China dropped 14.4% from a monthly record 860,000 in January 2008.

January sales were 0.8 percent below those in December, and below the 790,000 some analysts had anticipated.

Last week, Mike DiGiovanni, General Motors Corp.’s (GM) executive director of global market and industry analysis, forecast that China’s car sales could hit 10.7 million vehicles in 2009, more than his estimate of 9.8 million unit sales in the U.S.

China is certainly a major market for G.M. but the company is also losing market there. In October 2008, Toyota (TM) beat out G.M.’s Chinese venture as the number-two auto maker in China for the first nine months of the year. VW/Audi holds the coveted top spot in China.

If you’re interested in securing your financial future, you may want to contact your broker about ETFs and other funds based on Chinese equities.

A little-known indicator surfaced as China was preparing to attend the first meeting of the Committee on Statistics under the United Nations Economic and Social Commission for Asia and the Pacific, held in Bangkok, Thailand, from February 4-6.

An article in the People’s Daily called into question the final official GDP numbers for 2008 issued by China’s National Bureau of Statistics. Apparently, the 6.8% positive growth released in Q4 2008 did not correlate with the negative growth in China’s power consumption.

Now it seems that China will face a power glut this year, further calling into question its official GDP data.

The China Electricity Council (CEC) on Wednesday said in a report that demand for energy is expected to decline this year – with a possible uptick starting in Q3. The report cites shrinking exports as the culprit.

We’ve already written extensively about China’s record unemployment and factory closures. However, the extent of the problems have rarely become as clear as with the current CEC report on lower power consumption.

The CEC said that power usage grew 5.23% in 2008, or 9.57% lower than a year ago and the slowest in eight years.

The shrinking demand was mainly attributed to the industrial sector. Approximately 3.43 trillion kilowatt-hours of electricity was used by the industry last year, up 3.83% from a year earlier, slower than the overall social power consumption growth rate for the first time.

In 2008, China’s economy has reached its slowest pace in seven years. Beijing reported that the year-on-year growth rate for the fourth quarter slid to 6.8% from 9% in Q3 and grew 9.9% for the first three quarters.

The big question now is: are those numbers reliable?

We’ve been advising investor for months now to avoid China and instead look at emerging economies in South and Southeast Asia. This latest revelation about China’s questionable GDP data underscores our ongoing concern about any near-term recovery in China.

For investors, this could be a good time to get in early on the potential windfall. Currently trading at slightly more than $24.00, AT&T (NYQ: T) is hovering near the bottom of its 52-week range of $20.90 – $40.70.

If Apple does in fact introduce a new iPhone, it could be faster and cheaper than current offerings, or create a new low-priced niche that matches the performance of its current 3G model.

Regardless, the impact could only be good for AT&T, which is the exclusive U.S. network provider for the iPhone.

The latest buzz about a new iPhone originated from United Arab Emirates mobile carrier Etisalat. When it announced on February 4, 2009 that it will begin selling the iPhone 3G on February 15. A report on the contract also mentioned a new iPhone slated for June.

The source of the June iPhone release remained murky, but analysts have been saying that a new iPhone may hit the streets this summer. The investor play here would be a long bet that the rumors are in fact true, and that history would repeat itself when it comes to Apple’s iPhone being the best friend of AT&T shareholders.

Going back to January 2007, when Steve Jobs introduced the iPhone to the world, AT&T saw a tsunami of subscriptions.

AT&T had said it that it signed up 146,000 new subscribers in the first two days it offered the iPhone. About 40% of subscribers who purchased an iPhone were new AT&T customers, according to the company. AT&T executives also said at the time that “store traffic above historical levels.”

The profitable relationship continues…

In its Q4 and full-year 2008 earnings, AT&T reported that quarterly net income was down 23.3% year-on-year, with $2.4 billion in 2008 compared with $3.1 billion in 2007.

Wired voice-service revenue dropped from $9.8 billion in Q4 2007 to $8.8 billion in Q4 2008 – a decline 10.3%.

However, full-year net income was up. It increased 7.7%, from $11.95 billion in 2007 to $12.87 billion in 2008.

The company said the increase was largely attributable to wireless revenue, which shot up 13.5%, from $10.2 billion in Q4 2007 to $11.5 billion in Q4 2008. AT&T reported one million additional subscribers in Q4, resulting in a total of 77 million – an increase of 7 million in 2008.

The growth was directly related to iPhone sales. AT&T activated 4.3 million iPhones in the second half of 2008.

Apple’s iPhone played a major role in the 51.2% growth in wireless-data revenues in Q4. According to AT&T’s press release, “wireless integrated devices in service more than doubled over the past year.”

While analysts argued over whether or not those numbers met expectations, the bigger theme here is that a new iPhone could increase AT&T’s revenues in 2009. One way or another, that has to give the stock a jolt barring any unforeseen debacles in these crazy times.

The about-face article, which appeared in today’s edition, was written by Kate Galbraith – one of the three new green correspondents the Times has been trumpeting.

The Times reports that wind and solar energy are suffering from the credit crisis and “economic downturn.” These market realities are our core argument against alternative energy for the present time and foreseeable future. You see, the green contingent engages in a dangerous group-think that says if we all hold hands and click our heels, the financial argument for green will make sense in a world of cheap oil and high unemployment.

Apparently, the “feel-good finances” that we’ve been railing against simply aren’t working.

The Times reports “Factories building parts for these industries have announced a wave of layoffs in recent weeks, and trade groups are projecting 30 to 50 percent declines this year in installation of new equipment, barring more help from the government.”

The article quotes Mayor Richard Mattern of Fargo, ND who fell under the green spell. He told Ms. Gailbraith, “I thought if there was any industry that was bulletproof, it was that industry,” he said referring to the wind-turbine factory in his home town, which recently 20% of its workforce.

We take no delight in dancing on the pink slips of the unemployed. Our gripe is with Mayor Mattern himself, who espouses the same claptrap as the Obama administration. The difference is that when the edict comes from Washington, it falls into the category subsidized energy rather than viable business model.

The wind and solar industries are apparently hopeful that President Obama’s green thumb will help them flourish, according to the Times. But as the article states, these renewable energy plans “will take time, and in the interim they [wind and solar companies] are making plans for a dry spell.”

Even tax credits don’t seem to be working. According to the Times, “Banks have invested in renewable energy, lured by the tax credits. But with banks tightly controlling their money and profits, the main task for the companies is to find new sources of investment capital. Wind and solar companies have urged Congress to adopt measures that could help revive the market. But even if a favorable stimulus bill passes, nobody is predicting a swift recovery.”

Again, we do believe that alternative energy is viable – inevitable.  Unfortunately, it’s not the place to put your money today.

Mumbai’s sudden ban on Chinese toys was attributed to some political strife surrounding Pakistan or as an aggressive protectionist move disguised as new safety guidelines. Regardless, it hits China as toy factories continue to close in Guangdong Provence at a rapid pace. Whether or not the toy ban could inflict further damage on China-Indian trade relations remains to be seen, but if in fact dealings deteriorate China could feel the economic pain.

India’s imports from China surged by 60% in 2006-07 to reach $17.4 billion from $10.9 billion in 2005-06, according to the Global Network of Exim Banks and Development Finance Institutions (G-NEXID). China is now India’s largest trading partner.

In turn, the past few years have seen China grab 60% of the Indian toy market – displacing domestic manufacturers.

The ban came just a day after the Chinese Ministry of Commerce posted statistics revealing that nearly 1,000 Chinese toy exporting companies in its Guangdong province had closed in 2008. The carnage was caused by a combination of unsafe toys being exported to the U.S. and a rise in raw materials.

Guangdong province cranks out approximately 70% of China’s toy products. According to Chinese customs statistics, 922 toy exporters in Guangdong went out of business in 2008, leaving 2,167 left from the 3,089 toy exporters which were operating in late 2007. Dongguan, the toy manufacturing center in Guangdong, was once hailed as the world’s “toy capital” with more than 4,000 toy factories and nearly 2,000 suppliers.

For investors, the message is loud and clear: China is in for a long slog.

The fresh numbers reinforce our position that investors should look elsewhere in Asia for longer term profit opportunities.

Beijing said that approximately 20 million migrant workers have lost their jobs in China due to the economic downturn. The loss of jobs has prompted 15.3% of workforce in China’s new cities to return home – abandoning the modern urban centers that have come to represent China’s ballyhooed economic miracle.

This new survey was conducted before the Lunar New Year holiday which was celebrated in the last week of January, a holiday during which people returned home. The exodus was caused by a wave of factory closures as exports plunged in the wake of the current global recession.

Beijing admitted that 2009 could be the “toughest year” since the turn of the century for development of the countryside, which has fallen behind as Chinese economic reforms focus on cities.

Despite the gloomy news, the benchmark Shanghai Composite Index gained 9.3% in January 2009 as investors responded favorably to China’s massive economic stimulus package. Still, investors would be wise to consider other regions in Asia for faster gains than mainland China.

Liu Jiwei, an analyst from Pacific Securities, forecast that the growth rate of corporate earnings in China will decline to minus 10% in 2009 from a growth rate of 3% in 2008.”

Overall, 2009 is shaping up as a terrible year for investors with holdings in China.

We recently recommended that investors explore other regions in Asia that have investment potential. The key is to find countries that have cheaper factory labor than China.

We cited South Asia, which includes India, Pakistan and Bangladesh. In addition, parts of Southeast Asia (Cambodia, Laos, Myanmar, Thailand, Vietnam and Malaysia).

The rise of workers rights, coupled with last year’s dramatic inflation, has tarnished China’s reputation as the low-cost provider of manufactured goods. In turn, companies from Asia and industrialized nations are moving to cheaper alternatives such as South and Southeast Asia. In this case, investors would be prudent to follow the money.

Leading up to the Obama administration’s monumental $819-billion stimulus package, major news outlets have begun to run stories that challenge the viability of the alternative-energy component of the bill.

Alternative energy is certainly inevitability – whether or not it makes economic sense for American taxpayers and businesses. And eventually, maybe in our lifetime, renewable sources of energy as envisioned on the grand scale of President Obama and his followers will fulfill the promise of energy independence, environmental improvements and lower costs than fossil fuels.

In the meantime, however, the persistence of the White House to tout alternative energy as an instant fix that creates new jobs and energy sources to alleviate suffering among the unemployed amounts to nothing more than a cruel myth.

While we have been telling readers for months now that green won’t yield any near-term profits for reasons that are political, financial and technological, we see that Bloomberg and The New York Times have finally drawn a similar conclusion – perhaps starting a stampede away from the green monster.

On January 26th, Bloomberg ran a piece that said President Obama “may find it harder to increase renewable energy than his predecessor…”

The Bloomberg piece, in particular, cited the current credit crunch as a huge obstacle toward the construction of a widespread renewable-energy infrastructure. According to Bloomberg, “Obama’s goal to double U.S. renewable- energy by 2012 may take years longer because even fully funded projects take at least three years to develop.”

Further, the Obama folks set unrealistic goals strictly in terms of logistics, as many of these massive new energy projects can years to plan before the first hole is dug.

The New York Times, meanwhile, took a more political angle in their story of January 27th. The Times characterized the renewable energy struggle as geopolitical, with the service-orientated economies of the east coast mostly oblivious to the fossil-fuel mandate of manufacturing elsewhere in America.

This clash could pose some high hurdles for green-energy advocates to clear as they exert pressure from a lofty position of entitlement.

“There’s a bias in our Congress and government against manufacturing, or at least indifference to us, especially on the coasts,” the Times quoted Senator Sherrod Brown, Democrat of Ohio as saying. “It’s up to those of us in the Midwest to show how important manufacturing is. If we pass a climate bill the wrong way, it will hurt American jobs and the American economy, as more and more production jobs go to places like China, where it’s cheaper.”

Even Democrats from these so-called brown states could find themselves in a pickle as they try to balance the needs of their constituents against the partisanship of the new White House.

For decades, California has led the nation in environmental regulation, including the most sweeping effort to address global warming by imposing mandatory caps on greenhouse gas emissions starting in 2012.

As the Times reports: “But California and many East Coast States also differ sharply in the extent to which they depend on coal — a fossil fuel that is a major culprit in producing carbon emissions. California, for example, derived only 20.7 percent of its electricity from coal and 40 percent from hydroelectric power and renewable sources in 2005, while Ohio drew 86 percent of its electricity from coal that year, according to the Department of Energy. Other states of the Great Lakes and Plains are much more like Ohio than California in energy usage.”

Senator Debbie Stabenow, Democrat of Michigan, told the Times, “My message over all is that for us to support what needs to be done in addressing global warming we need to demonstrate that, in fact, jobs are created. It’s not a theoretical argument. We have to come up with a policy that makes sense, that is manageable on the cost end, that creates new technology — and that treats states equitably and addresses regional differences.”

With the Times, Bloomberg and other major media outlets getting wise to the big green lie, investors can easily find themselves in the position of waiting much longer for a profit than the hucksters and politicians would lead you to believe.