Skip to main content

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

Comments

Post a Comment

Popular posts from this blog

what people get wrong about tariffs

 The issue is simple. What percentage of the economy is dependent on tariff goods? The truth, is that the US economy is far more closed than people understand. People genuinely believe that all manufacturing has ceased to exist in the United States all given to China on the altar of woke policy the truth can be further from That statement. Only about 15% of US GDP is related to foreign trade. Of that amount, slightly more than half is from Canada in Mexico. And half of that is energy. What that means, is that about 7% of US GDP is tariff dependent. The proof in the pudding, is how little money tariff generates. People think that 30 or 50 billion is a lot it’s not in an economy that has $3 trillion. The impact on the US economy will be less visible but not absent. Inflation hasn’t occurred yet first because tests have hardly started to bite, but more importantly it’s such a small percent of the economy. Now certain things are critical. The rare earth metals from China were critical....
Post a Comment
Read more

Trump and Venezuela...

The US now owns Venezuela…and not in a good way.  America is not known for its nation building skills, and yet it now owns the disaster that is Venezuela.   Starvation and exodus are the natural progression.   In addition it will become a haven for narco-terrorists, more so than it already was. I am sure that Trump and his friends really thought that little attack very well…I guess that he will now attack Iran now.  
Post a Comment
Read more

Demographics

 I am preparing a kind of family tree for our children so that they know where they came from.  In my family I am the only survivor, although my brother and sister died recently they were both in their seventies (a story I told already).    It was a fun process, but it provided more than that.  First, I married relatively young I was 26 when I married and nearly 30 when our first child was born.   I was looking at my ancestors.  On my mother's side, she had 6 siblings, Four died before the age of 30, two in war, and two from illnesses.  Only she and a single sister survived.   The two boys had a child each but they died in WWII, and the other sister died as an infant.   what is interesting is that every one of my mother's siblings had children in their early 20s.   I know that my mom was hardly 20 when my brother was born.    What is remarkable is that among our friends, we are the only ones to have fou...
Post a Comment
Read more