Another voice
Me and my savings
Auberon Waugh
For the first thirty-five years of my life it was a point of pride with me that I had no savings, no investments, no wealth of any description which lawyers could foreclose upon. England's appallingly oppressive libel laws—responsible in large measure, as I frequently argue, for our approaching economic collapse by the protection they afford to crooks and incompetents in public life— make it most imprudent for a journalist to own more than one toothbrush and a change of underclothes.
Then, about eighteen months ago. I received £4000 of a legacy and could think of nothing in particular to spend it on. I was also a little conscience-stricken at the thought of my widow and orphans without a penny of their own, but it was clearly insane to invest the money in fixed interest securities at a time of galloping inflation, when the after-tax return from such investment covered less than a quarter of its annual depreciation in value. To have invested the money in equities might have been patriotic (according to a strange new idea of patriotism advanced by the Left) but I have always been sceptical about the likelihood of British workers being persuaded to do much work in my own lifetime, and even more sceptical about the likelihood of their allowing anyone else to take the profit if they do. Perhaps it would have been a fine and charitable thing to scatter the money among smiling, capdoffing workers. Even my stony heart would probably have been touched by their heartfelt cries: 'Tank you Squoire'.. :God bless you, your lordship, Zur.' That might be the ethical way tD behave. It might even be what is meant by patriotism nowadays. But it is not what is meant by savings.
In the end, not wishing to make any profit, still less receive any income from them, but hoping to keep the savings at the same value. I decided to invest in gold and bought 40 Krugerrands in December 1974 at the all-time high price of £96 each. This was done against the advice of every businessman. economic expert and financial wizard I consulted, a factor which added to my feelings of self-satisfaction. They, you see, were all going to be jumping out of windows and landing with a hideous squelch on the hard, cold pavements of Threadneedle Street and Cheapside within two years, while I sat counting my Krugerrands in a bar in Montmartre. a faint smile playing about my lips as I hummed Vlopres de ma blonde' and signalled for another glass of pastis ... A particularly agreeable aspect of this investment was that it left me with £140 to play with. After sonic deliberation. I resolved to spend it on luncheon with a City friend. I still possess those Krugerrands, although I forget when I last saw the City friend. When I telephoned my bullion broker this week, he told me that Krugerrands were 'buying' at £61, 'selling' at £63. In other words, I had lost £35 on each coin and my investment of £3,840 was now worth £2,440. a loss of 36.45 per cent. Again, allowing for an effective devaluation of the pound against foreign paper currencies of 39.6 per cent. this £2,440 was only worth £1,473. Then, if one allows that the foreign currencies against which the pound has slipped have themselves slipped in purchasing power by some 15 per cent, the true value, in December 1974 terms, of my £3,840 investment is now £1,252.70p. This represents a loss of over 60 per cent. I don't know what I'd do without my electronic calculator.
But at least I still have the Krugerrands. and at least nobody else has profited from my loss. As I say, any other method of 'saving'—whether leaving it in money or putting it into equities—necessarily involves giving a large part of the capital every year to the lower classes, who have done nothing whatever to deserve it and who will only be made idler and more conceited as a result. Moreover, they will spend it on hideous, corrupting and unsatisfactory things and end up less contented than before.
It is a,sign of a great man that he is prepared to admit he is in the wrong, has made a mistake. But I don't think I am quite ready to make my bid for greatness yet. Quite apart from the moral advantage of the decision I took, and the store I have undoubtedly laid up for myself in Heaven, if one examines the reasons for the spectacular fall in the price of gold, one begins to suspect that one may be even cleverer than one originally thought. When the bodies are flopping and squelching upon the pavements of Leadenhall Street and Old Jewry, I won't be drinking pastis in Montmartre but twirling the stem of my champagne cocktail at the Crillon. There won't be a faint smile playing about my lips but a horrible leer as I ogle my old friend Sam White.
The reason for the fall was that in the first week of January 1975, the US Treasury held the first of a series of gold bullion sales, as part of its campaign to demonetise gold and make the world go round on paper.
Before opening the sale, which was by auction, the US Government solemnly warned its citizens against buying any of the stuff it was offering for sale. If I had been an American citizen I would have fallen over myself in my anxiety to buy anything which came with such a warning from such a government. The dollar had already received
a body blow in August 1971., when Nixon devalued and ended its free convertibility into gold. But the Americans decided otherwise. Perhaps reckoning that if they had lost their faith in the dollar they had also lost their faith in the American Dream, they stuck by their silly little greenbacks and left me grinding my teeth in West Somerset over forty rather ugly gold coins which represented my life's savings. Of course, there is something distinctly fishy about a sale at which the vendor advises Purchasers not to buy. Since then. efforts made by world governments to bash my little nest-egg have redoubled. PlainlY, they are scared stiff of it. The International Monetary Fund now holds regular sales, at which vast quantities of gold are thrown on the market--at the next one, on Wednesday, they will be offering 780,000 oz (about twenty-two tons), with the promise of unlimited quantities coming soon after. BY way of disguising what they are up to, theY give most of the proceeds of these sales to the developing nations. How sweet! Just like our own beloved lower classes. By thY reckoning, the underdeveloped nations should receive s48,566,037 from rlexl Wednesday's sale if the price holds at sl06 per oz. Which, as I say, is all very fine and dandY. but isn't what is usually meant by the protection of international currency systems. Just what are these besotted Gnomes up to? The answer. seen.from the viewpoint of mY forty Krugerrands, is that they are involved in a gigantic "conspiracy between all the governments of the free world—that is to say the politicians and power-freaksagainst their citizens. By destroying gold. the governments of the free world hope t° convince us that we have no choice but trust their infinitely manipulable pieces of paper' In fact, of course, the opposite has happened. The more governments try r° discredit gold as an alternative to their increasingly worthless paper money, the more confidence in paper money is des', troyed. One day the American treasury wake up to the fact that as its gold stocks have diminished so has confidence in paper currency declined. At the end of the particular road on which it is set, it will find itself with no gold and a paper currencY which no one will touch. Long before that, of course, the policy will have been reversed. In England, it will be a criminal offence to own so much as a gold pen-nib. All currencies, including the dollar. will float against an incorruptible, impartial' imponderable Gold Standard whose corn" putation no human mind can grasp. isrl, electronic brain to which all internationa' trade is known will determine curreneY values min'ute by minute. I am ready for the moment the People's Militia arrive to seize my little hoard. I have a bottle of Aqua Regia (one part concen: trated nitric acid, three parts concentrate°, hydrochloric) in which it can be dissolve° and flushed down a lavatory before theY arrive. By then, I will have made my Po°.
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