THE FAR EAST: The New Gold Rush

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Once back in Hong Kong, the gold goes into the vaults of some 200 Chinese banks where it may be used for such delicate transactions as financing a shipment of Calcutta opium to Hong Kong or buying off Chinese Communist officials who have put the squeeze on the relatives of rich overseas Chinese businessmen. But the final market is most often India. Indian central bank officials estimate that India's private gold holdings exceed $3.6 billion (at the U.S. gold rate), up from $3.2 billion in 1948. The enormous trade in smuggled gold is a major reason India is chronically short of foreign exchange; one ounce of gold smuggled into India represents a loss of $35 in hard currency.

In their constant battle with gold smugglers, customs men all over Asia have come to accept as routine the typewriters with camouflaged gold space bars, the shipments of gold-filled salmon, the rump-heavy laying hens and the resourceful uses of just about every human orifice. But though the customs men know most of the tricks, they manage to intercept, by one estimate, less than 5% of the smuggled gold. Shrugged one cynical old hand in the gold trade: "After all, just for looking the other way when a bag of gold goes over the rail of an incoming steamer and onto a harbor boat, a customs man can pick up a year's salary."