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The corrupt Department of Buildings workers — who lined their pockets by ignoring violations or expediting construction and building work permits — will be arrested later this month, along with about two dozen Luchese crime-family captains, soldiers and associates, sources said.

“This is going to be big,” a well-placed source said.

Among the other startling revelations:

* Two of the crooked city employees are known by law enforcement as full-blown Luchese associates.

* The investigation included several landlords who own buildings in Manhattan and The Bronx — with at least one facing certain arrest, sources say.

* About 50 search warrants were executed in city offices, mob-run social clubs, wire rooms and wiseguys’ homes.

The nearly two-year probe grew out of a 2007 New Jersey case involving a Luchese faction that ran a staggering $2 billion-a-year gambling operation and supplied drugs and cellphones to Bloods gang members in state prisons.

That probe — which netted 32 wiseguys — soon spread across the Hudson River into the family’s Big Apple hierarchy, prompting surveillance and wiretapping by the NYPD and Manhattan District Attorney Robert Morgenthau’s office, the sources said.

The United States signed weapons agreements valued at $37.8 billion in 2008, or 68.4 percent of all business in the global arms bazaar, up significantly from American sales of $25.4 billion the year before.

Italy was a distant second, with $3.7 billion in worldwide weapons sales in 2008, while Russia was third with $3.5 billion in arms sales last year — down considerably from the $10.8 billion in weapons deals signed by Moscow in 2007.

The growth in weapons sales by the United States last year was particularly noticeable against worldwide trends. The value of global arms sales in 2008 was $55.2 billion, a drop of 7.6 percent from 2007 and the lowest total for international weapons agreements since 2005.

The increase in American weapons sales around the world “was attributable not only to major new orders from clients in the Near East and in Asia, but also to the continuation of significant equipment and support services contracts with a broad-based number of U.S. clients globally,” according to the study, titled “Conventional Arms Transfers to Developing Nations.”

Military rabbis are becoming more powerful. Trained in warfare as well as religion, new army regulations mean they are now part of a military elite.

They graduate from officer’s school and operate closely with military commanders. One of their main duties is to boost soldiers’ morale and drive, even on the front line.

This has caused quite some controversy in Israel. Should military motivation come from men of God, or from a belief in the state of Israel and keeping it safe?

The military rabbis rose to prominence during Israel’s invasion of Gaza earlier this year.

Some of their activities raised troubling questions about political-religious influence in the military.

Gal Einav, a non-religious soldier, said there was wall-to-wall religious rhetoric in the base, the barracks and on the battlefield.

As soon as soldiers signed for their rifles, he said, they were given a book of psalms.

And, as his company headed into Gaza, he told me, they were flanked by a civilian rabbi on one side and a military rabbi on the other.

“It felt like a religious war, like a crusade. It disturbed me. Religion and the army should be completely separate,” he said.

‘Sons of light’

But military rabbis, like Lieutenant Shmuel Kaufman, welcome the changes.

In previous wars rabbis had to stay far from the front, he says. In Gaza, they were ordered to accompany the fighters.

“Our job was to boost the fighting spirit of the soldiers. The eternal Jewish spirit from Bible times to the coming of the Messiah.”

Before his unit went into Gaza, Rabbi Kaufman said their commander told him to blow the ram’s horn: “Like (biblical) Joshua when he conquered the land of Israel. It makes the war holier.”

Rabbis handed out hundreds of religious pamphlets during the Gaza war.

When this came to light, it caused huge controversy in Israel. Some leaflets called Israeli soldiers the “sons of light” and Palestinians the “sons of darkness”.

Others compared the Palestinians to the Philistines, the bitter biblical enemy of the Jewish people.

But the world’s biggest hedge-fund venue and fifth-biggest bank centre is now threatened, as the government of the Cayman Islands heads for bankruptcy — unable to pay its own staff and facing the prospect of introducing taxes as income from the world’s shrunken financial system collapses.

But the situation is about to get worse after the British government, which has ultimate responsibility for the islands, last week refused to bail out the Caribbean idyll. It is not convinced the country will have the money to pay it back.

At the same time, hundreds of civil servants found that pension contributions and health insurance payments were missing from their pay slips. Contractors and government suppliers also had bills unpaid.

The leader of government business, William McKeeva Bush, begged the British government to borrow $310m (£190m) from banks. In a strongly worded response, Chris Bryant, a junior Foreign Office minister, has demanded the Caymans cut its borrowing and debt. And in a shockwave that will send tremors through the island’s financial elite, Bryant even suggested that the tax haven introduce taxes.

“I fear you will have no choice but to consider new taxes – perhaps payroll and property taxes,” Bryant wrote to Bush. “I understand, of course, that in so doing you will want to consider carefully the implications for Caymans’ economy, including the financial services industry.”

In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises.

It added that the present system, under which the dollar acts as the world’s reserve currency , should be subject to a wholesale reconsideration.

Although a number of countries, including China and Russia, have suggested replacing the dollar as the world’s reserve currency, the UNCTAD report is the first time a major multinational institution has posited such a suggestion.

In essence, the report calls for a new Bretton Woods-style system of managed international exchange rates, meaning central banks would be forced to intervene and either support or push down their currencies depending on how the rest of the world economy is behaving.

The proposals would also imply that surplus nations such as China and Germany should stimulate their economies further in order to cut their own imbalances, rather than, as in the present system, deficit nations such as the UK and US having to take the main burden of readjustment.

“Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability,” said Detlef Kotte, one of the report’s authors. “But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund.”

The proposals, included in UNCTAD’s annual Trade and Development Report , amount to the most radical suggestions for redesigning the global monetary system.

Bullion for immediate delivery surged to $1,007.70 in London, taking this year’s increase to 14 percent. Gold, which reached a record $1,032.70 in March 2008, is set for a ninth yearly gain. Crude-oil futures and all six industrial metals on the London Metal Exchange rallied as the Dollar Index lost as much as 0.8 percent. Raw materials typically move inversely to the U.S. currency.

Governments have cut interest rates and boosted spending to fight the worst recession since World War II, spurring investors to buy bullion as a hedge against potential inflation and debasement of currencies. Gold, silver and palladium holdings in exchange-traded funds have advanced to records.

“We don’t see any immediate recovery in the dollar and gold is one of the better alternatives,” said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “From here, the next technical level is $1,040, and at the rate it’s going it might not be difficult. There’s a lot of new money coming into gold.”