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Canada's Gold Reserves: Zero

This morning the Bank of Canada and the Federal Ministry of Finance confirmed that over the past 5 years, Canada had been selling off its gold reserves.  As of close last night, Canada's total gold reserves stood at zero.

For the Gold Bugs this is entirely incomprehensible, for them, gold is money (its not).  It is a store of value, but so is copper and zinc.  There is no particular reason for a government to hold gold as reserves, since its meaningless -- Nixon removed the gold standard, whereby gold was sold at US$35/oz.

Personally, I think that gold is a terrible store of value -- take a gold coin out of its protective envelope and watch its value plummet.  One of my closest friend worked in a Swiss private bank for many years.  Having purchased gold bars on behalf of clients they were disappointed to find several "counterfeit" bars in their vaults.  Moral of the story; don't buy African gold!  

Canada has decided to '86 its gold reserves because it no longer saw a reason to hold on to this asset class (plus Canada is one of the world's ten largest source of gold), and that they may well hold on to other assets instead (more liquid and cheaper to store).  Canada has never made a big fuss about its gold reserves.  During the war most Britain's gold was stored in Canada (in vaults below the Sunlife building in Montreal), but the reality is that gold is a lot of trouble.  It is expensive to store and to "use".  Canada has decided that the private sector saw more value to Canada's gold they they did, and so now its gone.

For the Gold Bugs it has to be a major disappointment.  The government without making a fuss got out of the gold hoarding business.  You just have to read the comments on Zero Hedge to see the craziness; Canada's been selling gold for 5 years... and the decision was taken by the Minister of Finance -- a Conservative and the policy was supported by the new minister -- a liberal.  Comments as to "who had the authority" and "what did they do with the money" and "is Canada in a criss", make for amusing reading.

Anyway, Canada's gold is gone

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