FRIDAY, FEBRUARY 7, 1975
SPEAKING ABOUT THE RESERVES, MR. BRAY SAID THAT IF THE GOVERN- MENT HAD VAST RESERVES AND FELT SURE THAT HONG KONG WAS IN FOR A SHORT BAD PERIOD, WE COULD REASONABLY AND DELIBERATELY DRAW ON THEM.
→BUT, HE SAID, WE DO NOT HAVE VAST RESERVES AND WE DO NOT KNOW EXACTLY WHEN THINGS WILL TURN UP.+
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IN FACT, BECAUSE NO ONE CAN REALLY FORECAST THAT TIMES CANNOT POSSIBLY GET WORSE, IT WOULD BE JUST AS WELL TO ALLOW FOR A LITTLE BAD LUCK, RATHER THAN DEPENDING ON GOOD LUCK,+
MR. BRAY NOTED THAT HONG KONG WOULD HAVE TO DRAW ON ABOUT $400 MILLION OF ITS RESERVES BECAUSE OF THE EXPECTED DEFICIT BASED ON SEPTEMBER'S FIGURES.
HE ALSO CLEARED UP ANY MISCONCEPTIONS ABOUT THE RESERVES BY DESCRIBING AS +ABSOLUTE RUBBISH+ SUGGESTIONS THAT THEY WERE JUST +SQUEEZED OUT OF HONG KONG TO KEEP ENGLAND GOING.+
+HONG KONG IS A GREAT PLACE, BUT BY NO STRETCH OF THE IMAGINATION CAN ANYONE TAKE SERIOUSLY THE CLAIM THAT IT IS HARD- WORKING HONG KONG THAT KEEPS DECADENT ENGLAND GOING. WE COULDN'T ANY MORE THAN WE COULD SUSTAIN ANY OTHER COUNTRY TENS OR HUNDREDS OF TIMES OUR SIZE.>
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HE SAID MOST PEOPLE REALISED NOW THAT THE SURPLUSES WERE HONG KONG'S SAVINGS AND WERE NOT JUST GIVEN AWAY TO WHOEVER LOOKED AFTER THEM, THEY ARE BANKED IN A NUMBER OF PLACES AND ARE EARNING INTEREST, JUST AS HOUSEHOLD SAVINGS WERE MUCH MORE USEFUL WHEN BANKED.
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MR. BRAY ADDED THAT THE VALUE OF THE RESERVES HAD CERTAINLY BEEN ERODED BY DEVALUATION ABROAD, BUT THERE WAS NOTHING DELIBERATE OR FOOLISH ABOUT THE LOSSES.
+INDEED, SIR JOHN COWPERTHWAITE PIONEERED THE CONCEPT OF THE STERLING GUARANTEE FROM WHICH ALL OTHER STERLING HOLDERS BENEFITED. AS THE, GUARANTEE WAS ERODED BY THE CHANGING NATURE OF WORLD MONETARY ARRANGEMENTS SO OUR RESERVES HAVE BEEN DIVERSIFIED. NOT THAT TO MOVE OUT OF STERLING INTO, SAY, THE U.S. DOLLAR MEANS THE AVOIDANCE OF EXCHANGE RISKS,+ HE SAID.
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