# Canada sells off nearly half of all it's Gold reserves



## Terminator (Dec 17, 2014)

http://globalnews.ca/news/2508940/canada-sells-nearly-half-of-all-its-gold-reserves/?sf20706041=1

Thoughts? I'm pretty surprised to hear this news and think selling off all gold is insane.


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## james4beach (Nov 15, 2012)

That's surprising. Apparently Canada's gold reserves are now just 1.7 tonnes (which google tells me is 54,656 troy ounces).

We have less gold than Haiti, Trinidad & Tobago, and Papua New Guinea. Insane!


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## jdc (Feb 1, 2016)

Canada's gold reserves are so insignificant, $19 million, pocket change, that they might as well have none. 0.023% of total reserves.


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## jdc (Feb 1, 2016)

http://www.bankofcanada.ca/rates/related/international-reserves/


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## jdc (Feb 1, 2016)

The news story doesn't match the official BOC reserve report.


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## tygrus (Mar 13, 2012)

I'm sure there is lots in the ground if it ever becomes valuable again.

We are well on our way to a digital, cashless and no hard currency world.


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## lonewolf (Jun 12, 2012)

The productivity of Canada is more important then the amount of gold Canada has. I think we are loosing a little of both.


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## Eder (Feb 16, 2011)

Oil is more valuable as a currency than gold.


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## Tourist9394 (Jun 11, 2015)

lonewolf said:


> The productivity of Canada is more important then the amount of gold Canada has. I think we are loosing a little of both.


You call that little? Not surprised American hedge fund backed Postmedia did not report this.


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## Just a Guy (Mar 27, 2012)

Half of a rounding error is still significantly nothing. Read the article, Canada used to have 1000 tonnes in the 60's, sold most of it off in the 80's. We basically haven't had gold deposts in decades...

Bit late to get excited about it now, the horses left the barn years ago.


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## Terminator (Dec 17, 2014)

Just a Guy said:


> Half of a rounding error is still significantly nothing. Read the article, Canada used to have 1000 tonnes in the 60's, sold most of it off in the 80's. We basically haven't had gold deposts in decades...
> 
> Bit late to get excited about it now, the horses left the barn years ago.


I agree somewhat. But when we sell off almost HALF of all the Gold we have, I still find that alarming regardless of how little it really is.


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## Just a Guy (Mar 27, 2012)

So, you're concerned when they sell off 0.017%, but said nothing while 99.83% was being sold off because it wasn't "half" of the remaining?

I guess you'll be leading the revolution when they sell off the remaining 100% in one lump amount. 

There's a certain lot size that is needed to sell between governments...it's not like they sell them to retail clients, if they did, knowing government, it would cost them $2 for ever dollar sold.


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## james4beach (Nov 15, 2012)

Considering that gold has preserved value far better than any other currency this century, I'm amazed they're selling off remaining reserves.

Who is making these decisions? Is this a central bank decision, or a federal government department?


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## Just a Guy (Mar 27, 2012)

Look at the amounts, we haven't has reserves in decades. The "sale" was basically the same as the projected deficit for the year, not the amount spent, the amount we overspent.


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## cainvest (May 1, 2013)

james4beach said:


> Who is making these decisions? Is this a central bank decision, or a federal government department?


Well they have to get rid of it now, after all the price is starting to go up...


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## Rusty O'Toole (Feb 1, 2012)

They sold off nearly all our gold reserves years ago when the market bottomed @ 300 an ounce. The geniuses of the Bank of Canada.

From a Northern Miner article December 1998

Canada has been a leader of this global selloff. Once a major holder of the yellow metal, the Bank of Canada disposed of 594 tonnes between 1980 and 1996, upsetting most of the country's gold producers in the process. (Ironically, the Canadian politician who got these gold sales rolling now sits on the advisory board of one of the world's largest gold producers, but we digress.)

After a 21-month hiatus, the Bank of Canada got back into the game this year, selling 5 tonnes in July, 4 tonnes in August, and 7 tonnes in September. Experts say these sales likely were triggered by recent weakness in the Canadian dollar.

Canadian gold reserves now total a mere 81 tonnes, which means our national paper is backed with little more than, well, paper. Small wonder our currency is buffeted around by speculators; paper is a poor ballast. The United States, on the other hand, has kept a tight grip on its piles of gold in Fort Knox, and its dollar has become the de facto currency of the world.


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## Terminator (Dec 17, 2014)

james4beach said:


> Who is making these decisions? Is this a central bank decision, or a federal government department?


From the article... "The decision to sell came from Finance Minister Bill Morneau’s office."


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## Eder (Feb 16, 2011)

james4beach said:


> Considering that gold has preserved value far better than any other currency this century, I'm amazed they're selling off remaining reserves.


Yep...a real store of stable value haha


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## Rusty O'Toole (Feb 1, 2012)

If the gov't is selling could be time to go long.... look what happened last time... you are not going to get rich putting your money in the bank.... or in stocks.


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## dogcom (May 23, 2009)

If I were Canada I would instead be stock piling silver at today's prices instead of gold. Silver is mostly used up after it is mined where as gold is still stored somewhere ready to come back into the market. Of course if Canada did stockpile silver wall street would want to scam it from us and wouldn't be very happy about it.

Tygrus I think you are right that we are headed to a cashless society so we can be completely controlled and the money will be available to be stolen by the government or banks. Of course they will say it is about terrorism or whatever and I am sure most people are stupid enough to believe it.


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## Brian K (Jan 29, 2011)

I agree about the Gov't wanting taking more from us - like the carbon tax sNotley is implementing. If they were serious about carbon reduction they would offer tax breaks for installing newer high efficiency things to encourage a reducing in energy consumption. But this is just a sales tax in disguise to remove more money from us and the $$ will just go into general revenues. Optics.


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## james4beach (Nov 15, 2012)

Good news, donald and other gold-haters!

Canada has officially sold off ALL of its gold reserves. We are now free of this worthless inert metal.

Now we can load up our country's FX reserves with much better assets, like European bonds, mortgage-backed paper and Japanese Yen!

_(Yes the above is sarcastic)_


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## james4beach (Nov 15, 2012)

Let's examine Canada's history with its gold reserves. This Bloomberg article says


> Canada’s gold reserves peaked in 1965, when it held as much as $1,150,000,000 in bullion and coins. In 1980, the government began selling its gold “at a gradual and controlled pace” *to enhance returns*, with the proceeds invested in interest-bearing foreign currency assets, according to the finance department website.


So our country had the most gold FX reserves back in 1965. 1 ounce of gold was worth 35.12 USD back then. Today, 51 years later, 1 ounce of gold is worth 1250 USD.

But Canada traded gold for interest bearing foreign currency assets. 10 year US treasury bonds would be a pretty safe assumption. That's had an average yield in this time of around 5.5%.

To see which was the better foreign exchange asset, you just have to compare rates of increase of those in the same currency

USD bonds: 5.5%
Gold reserves: 7.3%

It's also interesting to look at the trend in both of these assets over the 51 years. Until around 2000, US Treasury yields were pretty high (generally north of 6%) and the gold price was going nowhere. In this timespan, UST reserves proved to be superior. These were the years of US dominance, supremacy of the U.S. Dollar, and the greatest economic boom in world history.

But things changed dramatically post-2000. US Treasury yields plummeted, first to the 4% mark, and in recent years below 3%. At the same time, gold has risen dramatically. After 2000, gold has been the superior reserve holding ... and Canada is not benefiting at all.

An Aside

My primary, long term investment thesis is that market dynamics changed around 2000. When you look at assets (stocks, bonds, commodities) and also economic data (growth, world trade, employment, wages, US debt) there are very notable changes at this point. My belief is that this marked an important turning point, and there are many fundamentals underlying it.

Much of the friction between my investment philosophy, and those on this board, comes down to my belief that things changed in 2000. Many people here disagree. As much of the CMF readership is of an older generation, it makes sense that their world philosophy -- including beliefs of the market -- are based on the "pre 2000" timeframe.


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## Brian K (Jan 29, 2011)

And we are going further and further into debt by borrowing money at higher and higher costs from others as our credit rating slips. Just issue another bond and let the younger generation pay for it with market involvement. All is fine until your mortgage is higher than the value in your home then it comes crashing down aka nothing to back up our commitments. But good - we will have our 'investment' in infrastructure with nothing to back it up (no gold reserves). Maybe we can start selling our highways to Warren B like we are doing with our power transmission system and add yet another tax (carbon) which we seem to be rolling over for because they tell us it is a good thing and will make me turn the heat down and not drive to the store.


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## jetsfan (Mar 20, 2015)

..


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## lonewolf (Jun 12, 2012)

james4beach said:


> So our country had the most gold FX reserves back in 1965. 1 ounce of gold was worth 35.12 USD back then. Today, 51 years later, 1 ounce of gold is worth 1250 USD.
> 
> 
> 
> ...


 1965 was when the price of gold was fixed. I m for free markets. The inefficient government tells us what is & is not legal tender which is crazy the free market is always more efficient & it would figure out the best form of money. I do think we will get a lower price for gold/silver in next 10 years though better be care full with this one( don't want to miss it & hold in such a way government does not confiscate maybe have citizenship & holdings in another country) I really think this is where the real money will be made & those holding fiat could lose big time.


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## Brian K (Jan 29, 2011)

Interesting you thought my comments were partisan. Just more of a sad commentary on how we have been governed and sold that debt is good over the years. If I ran my personal finances the way we have been told is a good thing - I wouldn't be retired now. A new roof isn't an investment - it's maintenance and I generally do it when I can afford it rather than borrow to do it. By the way our 'beloved' Conservatives in Alberta sold our transmission lines to WB via SNC Lavalin.


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## The_Tosser (Oct 20, 2015)

LMAO,

So what have i learned in the past dozen or two posts?

1.) People still don't understand Sovereign currency issuers, IE our Fed Gov.

2.) People have no clue what 'pegging' of a currency will eventually lead to, be it gold, feathers, sea shells or other currencies - Please educate yourself with Bretton Woods but only if you're going to look @ it with Sovereign issuers in mind (reality) or you'll just f*ck up your thinking, again.

3.) People still think that Fed Gov needs to or should, run its 'Household' like you or I do - Here's a hint, it doesn't, and shouldn't, or your dumb a**es would be broke(r). 

4.) Stupid citizens breed stupid Government Reps who breed stupid citizens who breed stupid Gov Reps who....... roflmao 

5.) People still think <Canada-Federal> is borrowing its own money and is somehow in 'debt' and that future citizen will have to pay for said "debt'. - Please see point 1, followed by point 2, followed by...well you get the picture - no wait, you don't, rofl.

6.) Not one of you geniuses yet have told me where your money, savings, TSFA/RRSP investments, 'your wealth' etc etc etc actually come from in the first place. - The "Wealth" of the private citizen + other users = the "Debt" of the sovereign issuer IE it's purely an accounting entry to balance the books. - That's all you need to know until you can get your IQ's out of the ditch, then we'll fill in the blanks after you have 'walking' down.

You all have 2 days off soon, please educate yourself for the Sovereign Money test on Monday morning. 

I'm constantly being told we have an intelligent group of 'investors' here. I'd like to see it soon. Please surprise me. 

I will give you a gold star on anything better than a 40%. This is the Canadian education system, we have low standards of what constitutes a good grade these days, rofl. :smilet-digitalpoint


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## lonewolf (Jun 12, 2012)

The_Tosser said:


> LMAO,
> 
> 
> 
> ...


 I don't have any money in TFSA/RRSPs only have IOUs from the financial institutions I deal with. One look @ a chart of debt of most countries & the amount of debt will crash. Which means the IOUs I m holding may not be paid back. Everything in the universe is in limited supply even the amount of debt which is forming a parabolic arc. Parabolic arcs when complete end in crashes it has been & will be the law of parabolic advances.


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## Brian K (Jan 29, 2011)

Interesting opinions from Tosser.


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## lonewolf (Jun 12, 2012)

I try not to have opinions, though I don't have a high success rate. Without the precise information one can not judge rationally that which is true or false.


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## lonewolf (Jun 12, 2012)

Brian brings up a very important subject "opinions". When the mind is a junk heap of theories that are not true it is not a strong weapon for playing the markets. It is my opinion LOL having opinions & not playing the markets based on math, statistics & numbers is perhaps the biggest reason for failure. Emotions are automized value responses issuing from the subconscious from the context of ones thinking of that which is for him or against him. So if ones mind is a powerfull weapon & is only full of that which is true by replacing that which is false with that which is true emotions will be in harmony with ones thought making them a strong player @ the table.


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