CITY AND SUBURBAN
Gold is on your side, and governments aren't, so keep it under your rice-patch
CHRISTOPHER FILDES
Gold stands by you when governments fail you. The Thais and Koreans have found this out the hard way, which is why their governments are trying to take their gold away from them. 'We will help our- selves,' says Tarrin Nimmanahaeminda, Thailand's finance minister, whose turn of phrase is unfortunate. Not long ago it was our turn. When inflation was at 26 per cent and the pound was collapsing, we could have been sent to jail for owning gold. Nowadays we are brainwashed to believe that gold is a disastrous investment, with its price down this week to its lowest for 18 years after selling from (of course) Korea. That, though, is its price in dollars, and the dollar is flexing its muscles. The price of gold in bahts or won has gone straight through the roof, and a Thai or Korean investor who swapped his country's paper money for a nice solid portable ingot has done himself the favour of a lifetime and must try to keep it safely buried in the rice- patch. That is gold in action as a store of value. It is the unofficial alternative to the money that governments and central banks produce. No wonder they hate it and use their powers to rig the market against it. (You can now go to jail in Korea for spreading 'economic rumours', though offi- cials who lie like flatfish are presumably exempt.) The world's most disastrous investors are its central banks. They own more gold than anyone and keep it in reserve, but they have lost no chance to run gold down and dump their stocks on the market — even the Australians, who mine gold, and the Swiss, who hoard it. The crisis in Asia now serves to remind them what they need reserves for. Then Asia's governments round on their citizens and help themselves.
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