STERLING DECLINE

Hokitika Guardian, 6 December 1932, Page 5

STERLING DECLINE

POSITION OF THE MONEY

MARKET

GILT-EDGED’S RECOVERY.

(United Press Association—By Electric Telegraph—Copyright)

LONDON, December 3. The worst feature of the decline in sterling has been the destruction of the cohesion of the sterling bloc. Scandinavian, South American and other currencies linked with sterling have had their currency appreciate on sterling’s decline, which was also a powerful stimulant to deflation! Gold prices of most commodities ha\ f e fallen during the week, meat and wool being notable exceptions, but wheat touched a new low record.

The full of sterling is out of proportion to the actual business transacted. There is no evidence of a flight from fixed interest securities, owing to in*, flat ion fears. On the contrary, the trend of industrials is downward. War debts overshadowed the markets, gilt-edged movements being unusually wide, but there is not the slightest evidence that confidence is affected. The city, admittedly is more concerned in honouring obligations to America than the economic consequences thereof. A recovery of giltedgeds significantly followed the inspired reports that i Britain would pay it America ins'sts.

The Conversion Loan was brought to a triumphant conclusion, when a turnover of more than six hundicd millions, the largest amount recorded in any market, was completed without disturbance, despite the war debt uncertainties and exchange complications.

The expected increase in market supplies of credit has not materialised, a s the authorities have, been for many weeks purchasingt the unconverted war loan testifying to the care and skill wherewith the entire conversion was planned.