Fleming was, of course, writing in the 1950s, before the Bretton Woods agreement which pegged currencies to gold was dumped by Nixon in 1971. Just as well, because, if his observation still held true, sterling would be pretty much worthless - Britain has just 310 tonnes of the yellow metal, little more than Spain and a lot less than Italy. And even though the US is the world's largest gold holder with 8,000 tonnes in Fort Knox, the ratio of its gold to its monetary base nevertheless stands at an all time low.
Certainly there are many who subscribe to the view that debt-backed fiat currencies are destined to come crashing down further than they already have. The 'debauchment' of currency - as Keynes described the unsupported issuance of money in his frighteningly prescient book the 'Economic Consequences of the Peace' written in the wake of the Treaty of Versailles - throughout the twentieth century has seen the purchasing power of the dollar tumble by around 90 per cent relative to gold since 1971. The pound's fall has been similarly precipitous.
It isn't just conspiracy nuts and doom mongers who believe something isn't right with the Western monetary system - central banks in developing economies, worried about the future value of their large dollar reserves, have been big recent buyers of gold, not least China, for which gold represents just two per cent of its reserves.
Which is why gold's recent plunge is somewhat curious - in fact, some say, only a rigged market can explain it. While the heavy falls over the last few days have spooked some punters into cashing out their paper gold positions, held mostly in ETFs, central banks – which own a fifth of the world's gold - have not been selling. And the imminent forced sale by Cyprus of €400m of centrally held gold would not alone be enough to trigger the collapse we've seen, even if other southern European countries follow suit, because for every seller there will be no shortage of buyers who believe the barbarous relic will hold its long-term worth better than paper currencies.
So while I would like to believe in spymaster M's retort to Bond's report - that "I should have thought the strength of the pound depended on how hard we all worked rather than how much gold we'd got" - I simply can not envisage the Western world ever being productive enough to catch up with its monetary policy. In short, if you own physical gold, hang on to it.
