LETTERS
Precious borrowing
Sir: What a delight it is to see my old friend Christopher Fildes endorse, and in public (City and Suburban, 6 April), a rela- tionship he has privately described as unwise speculation.
I refer, of course, to his recommenda- tion that building societies should be forced to protect themselves from the disasters brought about by excessive mort- gage lending by buying large quantities of precious metal.
For some years I have suggested to him that a house buyer/borrower would be better served denominating his borrowing in real property, such as gold or silver, rather than in money. By so doing, he would be borrowing like against like — a safer thing to do in the long term, particu- larly in a politico-economic climate where inflation is described as Public Enemy Number One and house prices are not supported by the devaluation of money. He would also benefit from paying interest at rates in the low single figure range.
I am sad, though, that although some two years ago I managed with Christopher Fildes's help to persuade the daily news- paper to which he contributes such an excellent Monday morning column to be the first to publish the inter-bank market interest rates for gold lending, he persists in the view that the owner of gold is deprived of interest on his asset. On reflection I am sure that he will remember that the gold loan business — even if not the silver mortgage — and its attendant interest return to the metal owner/lender is alive and well.
Peter Hambro
108 St George's Square, London SW1
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