Skinflint's City Diary
The gilt-edged market has fallen and the cause as ascribed by the press is Mr Healey's potential borrowing requirement if all Mr Benn's ideas find expression in the budget. I do not think that this is the true cause for the fall. It seems to me to be more likely to be a shortage of liquidity in the clearing banks and institutions, as well as by squeezed individuals releasing their savings. Liquidity is now at such a critical level as to give cause for terrible anxiety even by businesses that are profitable enough to be able to provide ample cover for the servicing of debt as well as having available proper security at today's down-graded values. Mr Healey must make liquidity a first priority in his budget next week — and here Mr Lever's plan to utilise "street money" will help without a dangerous increase to the money supply, if he is able to persuade the Cabinet to accept the idea. Just now, the fall in, gilts is not as severe as it might have been since there are still some institutions that are not selling giks in order to meet withdrawals of one kind or another, but are in fact placing cash they have available in government stocks and thus marginally supporting gilt-edge prices; • though there is an inevitable further draining of the private sector's cash by this action.
Shady practices
I do not know if you subscribe to the view that I have long held, that there is often a conspiracy between a Master of Foxhounds and his huntsman to ensure that a breeding vixen and a few cubs are kept in a shed somewhere. If you do, you may also suspect that insurance brokers and stockbrokers of the more disreputable kind are not beyond adding a bit to the price that they have been told to charge as a premium by the insurance company, or the price by the stock jobber for whom they are acting. I've often tried to discover if there's a scrutinising body in the insurance
Krugerrands
For some reason no one dares to mention the true use of Krugerrands. They are not necessarily a store of value from which to speculate against a possible increase in the free market price of gold. The United States Government and any regulations set here by Mr Healey in next week's budget will see to that. Krugerrands are being bought as a conveniently sized and generally recognisable article that lends itself to curreneY smuggling and beating the exchange control as well as Mt Healey's dreaded taxes. It is capable of being hoarded in a small waY against economic collapse. In spit.e. of this advantage, illegal though it is, do not touch them at the price to which dealers have pushed them. It is certainly easier to buy Krugerrands in quantity than it will be to sell them once they start getting dumped on Swiss banks in Geneva by English currency smugglers.
world or in the stockmarket that inspects brokers books to see that premiums or buying and selling orders in the case of stockbrokers match each other less the proper commission payable, and no more. If you are so bold as to ask you will probably be fobbed off as I have been by being told that this isn't done in the City and that anyone behaving in such a way wouldn't last for long.
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