Gold fingers
Sir: I refer to Mr Fildes's excellent article on gold (City and suburban, 7 March). One reason for the depressed bullion market is the huge speculative position of market operators who, courtesy of the world's cen- tral banks, have borrowed up to three years of world gold production at derisory inter- est rates of one or two per cent. They have sold this gold, hoping to buy it back more cheaply in the future. But, unlike paper money, gold, as we know only too well in South Africa, is difficult and dangerous to produce. What happens when the banks want their citizens' gold back? After all, there is a growing deficit in the market. And, recently, physical gold has been hard to come by.
Thus are present all the ingredients for a market scandal. Fingers may point at those custodians playing fast and loose with the national treasure. And as for the specula- tors, if I remember correctly, 'He who sells what isn't his'n, must buy it back or go to prison.'
Adam Fleming
PO Box 31198, Braamfontein, South Africa
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