Gold for the wise . . .
MY NOTION for the New Year is one which the fund managers will think eccen- tric. On behalf of the Friends of Friendless Investment, I invite your support for gold. There are not many things you can buy, with pounds, at 1979 prices, but gold is one of them. A weak dollar and a battered gold price have, in combination, seen to that. Distress selling from the late Soviet Union, fraudulent conversion of its reserves, and recession in gold's industrial markets have all kicked the price when it was down. It seems a long time since the queues formed in Hatton Garden — gold ornaments and knicknacks being brought in for meltdown, as gold bullion soared breathlessly towards $1,000 an ounce, almost three times today's price. What broke the boom was the cost of borrowing dollars to buy the gold. Interest rates were driven up to 20 per cent. Now they are at the lowest for 20 years or so, and the President's mouthpiece has been saying that there is plenty of room to cut them again. A financially driven recession has now reached the stage when borrowers kick the habit. (Ours may be near that stage.) If the Americans are trying to get out of trouble by depreciating the dollar which is what it looks like — that must tempt the buyers back for gold. It is the ultimate insurance; every home should have some. The trouble is getting it home. You can conveniently buy it in one-ounce Krugerrands, but gold coins, by a fatuous fiscal quirk, are an investment which (unlike shares) is subject to Value Added Tax. Banks will buy and hold them for you in Jersey or Guernsey, where they are free of Vatmans's Blight. If you happened to be in the Channel Islands and accidentally brought a few Krugers home in your pock- et, that would be careless of you, so please do not tell me.
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