\

19 - North Shore News

’ dmittedly, gold investors are
ay t to the bank: as the. value ‘of the .

finding a safé storage © place:
‘In most cases. you'll pay the
bank to look after it or them
in a safety deposit box. Even
if they were manufactured in
‘more aesthetically appealing

te course ., Was that I laughed’
‘three years go when ngold was
selling

believing it it would a eventually

- plete.-

$200. .

_- inactive,

. By the time it. did, I'd
temporarily. ‘stopped
_-~ and Td also
chickened out: Today gold
has probably passed the $430.

- Mlark,.an average gain of

' been’ forecast . for
Christmas : ‘and:-some of the. -

more ‘than 100. per cent a
year. A $500 price tag has «

smart chaps (are ‘even
predicting $1, 000. an- dunce.
within the none too distant
future.

“So what do you get in
return?

According to the size of

your bank balance, one or

more small yellow metal
bricks, for which you have
the immediate problem of

- deficient.

this -

-.to. ‘survive. a. Possible: com |
a ‘collapse. of---: the
“monetary : ‘sys! em:: How. can
you go wrong. ‘with an ‘annual
return of: 100 .per cent. or
' more from. Scotiabank
“Wafers? “ds oe .

ae s like a licence | to print

money _ which, come to
think of it, is: ‘how’ ‘all the .
trouble. started” in the first:

place. _

_ ECONOMIC LUNACY

shapes -- small statuettes: of. .

Bank of Canada Governor

Gerald Bouey, for example - ~
' little about:

- gold bricks are definitely

- not recommended — as
_ mantelshelf ornaments. -
PRODUCES NOTHING:

Although “quite a pretty
metal and, in’ consequence,

_the ‘delight of jewelers way
‘back into the mists. of an-

tiquity, gold is singularly
in — utilitarian
qualities. It’s so soff that it

‘ usually has to be alloyed

with other metals to. be of

-any practical use at all. |

’ As a conductor of elec-

' tricity, it’s inferior to both
' silver and copper. For the.
: Most part, it’s chemically
being neither.

corroded by moisture nor
affected by oxygen or most

‘ acids. You can’t eat it. You

can’t live in it. It produces

nothing. And it never grows -

in size.

- It just lies there waiting -

for youto sell it again.

Today, when you do sell it _

again, there’s an excellent
chance, 'of "course,

paper profit, the emphasis

“being on paper. What you'll a

_ get in return is a bunch of
devalued paper dollars -—

‘which is precisely the reason
_ why you shelled’out a rather

smaller number of somewhat
less devalued paper dollars
to buy gold in the first place.

Nevertheless, say the gold
buffs, that’s the surefire way
to beat inflation in the short

you'll make quite a nice ‘*

Having: ‘the advantage of.

understanding almost as
present-day
economics. as most
‘professional economists, I

venture to offer three good

reasons why’ gold -- quite _
inherent

aside from - its
uselessness -- simply isn’t ‘the
‘answer to current problems.

Firstly, to pretend that an°

-investment which ‘doesn’t
add a single cent of real
wealth to society as a whole
can continue to provide its

investors with an annual 100
per cent return » on - their

term and, in: ‘the long term, |

paper | money
“economic: lunacy. «
-bubble. that: must sventaally-

0 Ou ‘present’ headaches.’ A

Secondly, -

help. even in the:.casé. of. a

complete collapse™ of — the
- monetary. System, ‘suchas’.
happened in Germany after, os

both: World Wars.

= that’s a mere billion dollars
What typically happens in

such . events’ is. that they

invent a new currency with, °

say, a A-to-10, ratio against ..
the ; old,

“Tes, a ex

gold ‘holdings
are; unlikely. tobe! of. much

_Siscredited.. :

“Jong-term. impression: on the
ot causes: ‘of’ inflation,
alo ,

s Gnoughrol of the stuff around to
provide ‘any: lasting. relief for.

U~LS.. “Treasury expert :
estimates that ‘there © isn’t
more than about two million’ :
ounces of ‘gold available in’ lasts‘and:
the entire world for. trading . ‘steeriz

on any given day." j

“Even at $500 : an ounce, c;

“worldwide. It’s about: the.
size of the budget -deficit
Canada i is currently running .
up:every month. It’s ap-~
‘proximately ° one-seventieth .
of the ‘country’s national.

dollars you “get one ‘brand--
‘new dollar and/start.all- over.-quarter- -of -the-B.C.- govern:

again. At that point the price

of gold, too, would obviously 2

be divided . by 10. = so: it

wouldn't .. :make any. -dif-
‘ference’. whether your
$10,000 savings were in-gold

bricks .or _ term. ‘deposits.
Either way you'd pick
yourself up and dust yourself
down with” exactly ws 000
new dollars. an kee

;
why Seen

“cheerful figure, - less. than’'a .
“ment's revenue last year, -

Glamorous | it. ‘may be fo: a
the moment, but. gold is still -
only a tiny market in the
overall: scheme. of things.- ‘Bia
True, it has given the dollar:
a nasty head cold, but even. -
influenza is rarely fatal now-
-adays. Certainly the 1979 |
_ gold: rush. is nowhere . near a

in

. e. big. ‘enough | to. make - aay 8

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