Canada Sells Nearly Half Of All Its Gold Reserves

Tyler Durden's picture




 

By Monique Muise, as published on Global News

Canada sells nearly half of all its gold reserves

The government of Canada sold off nearly half its gold reserves in recent weeks, continuing a pattern of moving away from the precious metal as a government asset.

According to the International Monetary Fund’s International Financial Statistics, Canada held three tonnes of gold reserves as of late 2015.

 

The latest data, published last week, show the total Canadian gold reserves now stand at 1.7 tonnes. That’s just 0.1 per cent of the country’s total reserves, which also include foreign currency deposits and bonds. In comparison, the U.S. holds 8,133 tonnes of gold, while the United Kingdom weighs in at 310 tonnes.

The decision to sell came from Finance Minister Bill Morneau’s office.

“Canada’s gold reserves belong to the Government of Canada, and are held under the name of the Minister of Finance,” explained a spokesperson for the Bank of Canada on Wednesday. “Decisions relative to gold holdings are taken by the Minister of Finance.”

Reached by Global News on Wednesday evening, a spokesperson for the finance department said the sale “was done in the normal course of business for the government. The decision to sell the gold was not tied to a specific gold price, and sales are being conducted over a long period and in a controlled manner.”

This latest sell-off is indeed part of a much longer-term pattern of moving away from gold as a government-held asset. According to economist Ian Lee of the Sprott School of Business at Carleton University, Ottawa has no real reason to keep its gold reserves other than adhering to tradition.

“Under the old system, (gold) backed up currencies,” Lee explained. “The U.S. dollar was tied to gold. One ounce was worth US$35. Then in 1971, for lots of reasons I won’t get into, Richard Nixon took the United States off the gold standard.”

Gold and dollars were interchangeable until that point, he said, but in the modern financial world, the metal is no longer considered a form of currency.

“It is a precious metal, like silver … they can be sold like any asset.”

The amount of gold the Canadian government holds has therefore been falling steadily since the mid-1960s, when over 1,000 tonnes were kept tucked away. Half of those reserves were sold by 1985, and then almost all the rest were sold through the 1990s up to 2002.

By last year, Canada’s reserves were down to just three tonnes, and the latest sales have now halved that. At the current market rate, the value of 1.7 tonnes of gold comes in at just under CAD$100 million, barely a drop in the bucket when you consider the broader scope of federal finances.

According to Lee, there may soon come a time when Canada’s gold reserves are entirely a thing of the past. There are better assets to focus on, he argued, calling the government’s decision to dump gold “wise and astute.”

“It gives them more strategic flexibility to sell the gold, take the money and invest in U.S. government bonds, or United Kingdom bonds or French bonds or German bonds,” Lee said.

“Central banks can hold the government bonds of other countries, and they also hold actual dollars. The Chinese Central Bank actually holds hundreds of billions of U.S. dollars. Dollars are very liquid, so are government bonds, especially of a Western country.”

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Fri, 02/12/2016 - 00:14 | 7174907 Durrmockracy
Durrmockracy's picture

DOH!

Fri, 02/12/2016 - 00:15 | 7174910 So Close
So Close's picture

Canada on her knees and slurping away.

Fri, 02/12/2016 - 00:19 | 7174916 StackShinyStuff
StackShinyStuff's picture

Not sure what to make of it.  The London "Lines Around the Block" article indictated we are at a top, but this reminds me of back in 1999 when UK sold all their gold at around $250.  And we know how that turned out.  Oh well I guess I'll just keep stacking...

Fri, 02/12/2016 - 00:22 | 7174929 Durrmockracy
Durrmockracy's picture

Someone pushed and someone else got shoved.  Looks like the shovee was Lil PET this time.  If there's no supply their whole ponzi comes down tomorrow....

Fri, 02/12/2016 - 00:27 | 7174946 SuperRay
SuperRay's picture

Canada just got Merkeled!

Fri, 02/12/2016 - 00:30 | 7174955 Soul Glow
Soul Glow's picture

For anyone who thinks China is a knight in shining armor and wearing a white hat look at the gold price tonight - they want to suppress the gold price just as much as anyone, because they want to buy as much as possible at these low prices.

Fri, 02/12/2016 - 00:36 | 7174984 cheka
cheka's picture

the crown's bitch, bitchez

Fri, 02/12/2016 - 01:34 | 7175115 Lore
Lore's picture

WHO is buying -- China?  WHY did Morneau give the order to sell?  Canada's reserves belong to THE PEOPLE OF CANADA, not goobermint. You RUDE SOB.  You could at least wine us and dine us BEFORE YOU FUCK US! 

Then again, if it comes down to a choice of "SELLING" your nation's reserves vs. having them STOLEN by marauding American psychopaths who invade your sovereign territory, looting and pillaging and burning and murdering thousands of civilians along the way, consistent with the recent trend, well, then I suppose the case becomes more clear. 

"Global News" is shit. Most mainstream Canadian reporting is fluff and shit.

"Ian Lee of the Sprott School of Business at Carleton University" is either extremely naive or a whore. Either way, after this, I wouldn't listen to any advice from that SOB.  Ian, if you're reading this, you're going to eat your words someday.  See you someday in a tent city.

Fri, 02/12/2016 - 01:37 | 7175141 thesonandheir
thesonandheir's picture

Good move for Canada, gives the warmongers down south less reason to invade 

Fri, 02/12/2016 - 03:55 | 7175340 Bokkenrijder
Bokkenrijder's picture

"Canada sells nearly half of all it's gold reserves."

Well, that certainly sounds like a lot, until you read that they only had a measly 3 tons to begin with! On the other hand, if things become desperate enough, they could always nationalize their gold mines.

(p.s. it's a good Canadian joke nevertheless!)

Fri, 02/12/2016 - 04:31 | 7175388 giovanni_f
giovanni_f's picture

I am not sure they "sold" it. Maybe it has been simply written off as  "loss" due to a "outdated chlorination process" used at the Ottawa plant. What a banana republic.

http://www.theglobeandmail.com/news/politics/missing-gold-never-left-the...

Fri, 02/12/2016 - 05:46 | 7175428 Harlequin001
Harlequin001's picture

'“Canada’s gold reserves belong to the Government of Canada,'

That's your problem right there.

Government is the custodian of gold for the people. It is supposed to be the arbiter of weights and measures.

It seems to have helped itself to the people's wealth.

Fri, 02/12/2016 - 07:31 | 7175495 VinceFostersGhost
VinceFostersGhost's picture

 

 

 

 

Canada sells nearly half of all its gold reserves

 

I stand in the presence of brilliance.

Fri, 02/12/2016 - 08:03 | 7175532 Supernova Born
Supernova Born's picture

Canada cannot be outdone by the BoE back in '99-'02.

They sold at the low also.

Competing for Upper Class Twit of the Commonwealth requires blind commitment.

[Actually, I'd guess it was a "deal" with the Chinese so the Chinese wouldn't crash the Canadian real estate market]

There's Oliver now, he doesn't know when he's beaten, this boy, he doesn't know when he's winning either. He doesn't have any sort of sensory apparatus.

https://www.youtube.com/watch?v=TSqkdcT25ss

Fri, 02/12/2016 - 08:05 | 7175566 cheka
cheka's picture

canada has no sovereignty.  the crown is the sovereign.  same with australia

 

Fri, 02/12/2016 - 09:19 | 7175834 remain calm
remain calm's picture

Would really love to hear Eric Sprotts take on this? Eric what ya think?

Fri, 02/12/2016 - 08:17 | 7175609 DanDaley
DanDaley's picture

the U.S. holds 8,133 tonnes of gold,

 

Just how would you or anyone else know that? Too funny.

Fri, 02/12/2016 - 09:06 | 7175778 PT
PT's picture

Canada sells all its gold?  Excellent news!  Remember what happened last time all the Central Banks sold all their gold?  Yeah, I'm hoping everyone else has forgotten.  Now I just need some money! ...

Fri, 02/12/2016 - 10:11 | 7176093 BarkingCat
BarkingCat's picture

Canada is a British colony pretending to be a country.

Just shut up and do what your wrinkled ass owner orders you to do.

Fri, 02/12/2016 - 03:51 | 7175342 Motasaurus
Motasaurus's picture

So now we know how Germany got their gold last month.

Fri, 02/12/2016 - 07:52 | 7175539 jughead
jughead's picture

pfft...like the US needs an excuse.  We're exceptional ya know. 

Fri, 02/12/2016 - 10:18 | 7176128 Countrybunkererd
Countrybunkererd's picture

Even if Canada held all of that gold it would cost more for the US to invade than the TINY amount of gold holdings Canada has!  I don't disagree, as an American, that the US Government has a problem with going to war against the will of the people.  It seems Canada's socialistic leaning allows the government to sell their gold because they gave their government the right to do so.

How can anyone not see that the problems we are facing are caused by centralized governments around the world?  They can care less what their citizens want and know they can railroad them at any time and in any way they choose.  WHEN will the people say ENOUGH?!!??!!?

Fri, 02/12/2016 - 01:38 | 7175143 glenlloyd
glenlloyd's picture

The people that run the show up there just aren't very bright....

I mean come on, what else is there to say?

Fri, 02/12/2016 - 06:25 | 7175453 Dame Ednas Possum
Dame Ednas Possum's picture

Aaaaand it's gone... eh!

Fri, 02/12/2016 - 07:33 | 7175501 Whalley World
Whalley World's picture

Actually, if you compare the smarts of Canadian prime ministers with US leaders you would see your assertion is incorrect.
Stephen Harper was an econ prof
Cretien a skilled political operator
Trudeau was brilliant, Pierre that is not the current canoe instructor.

Fri, 02/12/2016 - 08:42 | 7175674 Bendromeda Strain
Bendromeda Strain's picture

Econ prof? Political operator? Oh, I get it. They're smart like weasels...

The Trailer Park Boys would know better than to sell sovereign gold at this time. Jus' sayin'.

Fri, 02/12/2016 - 10:10 | 7176089 Normalcy Bias
Normalcy Bias's picture

Damn straight! You'll never see J-Roc sell his weight. Know what I'm sayin'?

Fri, 02/12/2016 - 10:32 | 7176205 Countrybunkererd
Countrybunkererd's picture

When you have a YALE educated, Nobel Prize winning (that says a lot too) economist state that we should mint something called "a trillion dollar coin" and pay off the debt you have to step back(in disbelief that it was even stated) say that ANY AND ALL OF THESE EGGHEADS NEED TO GET A KICK IN THE ASS AND SENT TO GUANTANAMO PRISON for re-education via waterboarding.  They have no sense of anything in reality and maybe a few years there will bring them back to what REALLY goes on in this world.

I mean the arrogance and distain these dirtbags have for anyone not in their club is disgusting.  You can see that they don't really care if the US moves into Socialism or Communism for that matter because they believe they are both Titans of Business in the Capitalist system and Bourgeoise class in the Communist system.  These elitist F*#kers with this mindset need to be hanged until they are dead, dead, dead!!!!!  He is just one of thousands and thousands of diseased rats leading the world that need to be exterminated.

Fri, 02/12/2016 - 10:38 | 7176239 Countrybunkererd
Countrybunkererd's picture

I better calm down or i will be sent for re-education.  Oh wait, i decided that i will not give up my guns, so i guess when i stop posting here you can assume they killed me via "police raided the wrong home" or "killed by an 18 wheeler with brake failure" (They will have difficulty getting to my vehicle so it probably won't be my vehicle with the problem...unless they are a really really good team) or as the saying goes "you will die doing the most dangerous hobby or thing you do" so that it has plausible deniability.  MOLON LABE F*#KERS!!!!!

Fri, 02/12/2016 - 08:37 | 7175667 Bendromeda Strain
Bendromeda Strain's picture

The people that run the show up there just aren't very bright....

This video begs to differ, young man. Mensa Reporter Bridget Brown boobsplains the reasons for a gold sale to those too dense to see the preeminence of The Dawler.

/evergreen

Fri, 02/12/2016 - 16:21 | 7177887 Greendawg
Greendawg's picture

Trudeau has dismissed the COMER vs BOC lawsuit as a conspiracy theory so we can see where he stands on real issues.  Is he really that stupid or just complicit in further enslaving Canadians in this socialist paradise for parasites?  Me thinks a little of both.  

Fri, 02/12/2016 - 00:55 | 7175039 Squid-puppets a...
Squid-puppets a-go-go's picture

yea, but c'mon. Whats the point of suppressing it? So that you can benefit from its catapult at a 'later' time of greatest benefit/convenience/URGENCY 

if that 'later time' aint on the immediate horizon with everything melting down, well i dont know what they're hoping for to pull them outta this deflationary abyss

 

Fri, 02/12/2016 - 01:11 | 7175074 Crash Overide
Crash Overide's picture

Isn't Gordon Brown a second cousin or something to Canada?

Fri, 02/12/2016 - 01:19 | 7175101 Soul Glow
Soul Glow's picture

The later time is on the horizon.  If I put a gold bar on train tracks people would make a judgement call whether they could grab it or not.  Guess China thinks they have a moment to spare.

Fri, 02/12/2016 - 01:36 | 7175137 quartshort
quartshort's picture

USA has 8,133 tons of of gold. HAHAHAHAHAHAHAHAHAHAHAHAHAAAAAAAAAAA!!!!!!!!!!!!!!!!!!!!!!! HAHAHAHAHAAAAA!!!!!!! HHHHHHHHHHHHHHHAAAAAAAAAAAAAA!!!!!!!!!

I stopped reading there.

Fri, 02/12/2016 - 06:33 | 7175462 neutrino3
neutrino3's picture

A reeeeealy healthy laugh shoul be rewarded by +1000.

Fri, 02/12/2016 - 10:16 | 7176117 BarkingCat
BarkingCat's picture

It could be true..... if you include jewelry and coins and bars in private collection.

Fri, 02/12/2016 - 02:20 | 7175218 Squid-puppets a...
Squid-puppets a-go-go's picture

china just wants to wait for the comex to be depleted. Then it can -without seeming hostile, and seeming perfectly reasonable - say 'well the comex has no phyz gold left so we henceforth are setting our own price '

Because to set up an alternative price mechanism before comex's demise would be construed as hostile rivalry.

So sure, china is happy for the price to be suppressed until then - it hastens the day the comex gets cleaned out of its last registered bar

Fri, 02/12/2016 - 10:18 | 7176127 BarkingCat
BarkingCat's picture

You give them too much credit. 

They are not that incentive.

Fri, 02/12/2016 - 17:54 | 7178467 Squid-puppets a...
Squid-puppets a-go-go's picture

well they already sheduled an april shanghai price fix for phyz only. market forces may alter the timetable

Fri, 02/12/2016 - 00:29 | 7174951 LetThemEatRand
LetThemEatRand's picture

The United States supports Saudi Arabia, who in conjunction with the US is destroying oil prices to punish Putin.  Who's your friend, Canada?  Bend over.

Fri, 02/12/2016 - 07:40 | 7175515 NoPension
NoPension's picture

No worries. Parker, Todd and Tony are working hard in the Yukon.

Fri, 02/12/2016 - 00:47 | 7174969 ebworthen
ebworthen's picture

Canada giving individuals who don't want to suffer NIRP a chance to buy.

Sell your Silver too Canada!

Fri, 02/12/2016 - 06:37 | 7175466 neutrino3
neutrino3's picture

"individuals"?

Fri, 02/12/2016 - 01:11 | 7175069 yellensNIRPles
yellensNIRPles's picture

Of course they are going to sell it at the bottom. The people who are in the know about this, and in control, certainly aren't going to buy it from them at the top. Massive moves of gold like this happen when the shit is about to hit the fan, or it is currently splattering across the room and just hasn't hit you in the face yet.

Fri, 02/12/2016 - 02:30 | 7175237 Zero Point
Zero Point's picture

And there I was thinking the world only got ONE Gordon Brown.

Fri, 02/12/2016 - 02:47 | 7175266 gimme-gimme-gimme
gimme-gimme-gimme's picture

Except gold is over $1700 CAD.

For once the gov is selling high, and can buy back low again.

Fri, 02/12/2016 - 04:11 | 7175369 fredquimby
fredquimby's picture

This will become known as "Bill's Bottom"

Fri, 02/12/2016 - 09:56 | 7176012 tmosley
tmosley's picture

Not much difference in that "top" behavior and a loss of confidence. This case is likely the latter, as it is happening at a price low rather than a price high.

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