It's Official: Canada Has Sold All Of Its Gold Reserves

Tyler Durden's picture




 

One month ago, when looking at the latest Canadian official international reserves, we noticed something strange: Canada had sold nearly half of its gold reserves in one month. According to the February data, total Canadian gold reserves stood at 1.7 tonnes. That was just 0.1 per cent of the country’s total reserves, which also include foreign currency deposits and bonds. 

As we noted, 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.”

* * *

Lee was right, because fast forward one month when earlier today Canada's Department of Finance released its latest official international reserves and as of this moment it's official - Canada has fully "broken away with tradition" and has exactly zero gold left.

This is what it said:

The Government of Canada sold 21,851 ounces of gold coins for settlement in February. On February 29, gold holdings stood at 77 ounces. The valuation is based on the February 29, 2016, London p.m. fix of US$1,234.90 per ounce.

And now, Canada can focus on buying "better assets." As to whether "the government’s decision to dump gold was wise and astute", we'll check back on that at some point in the near future.

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Thu, 03/03/2016 - 10:05 | 7265390 NoWayJose
NoWayJose's picture

That's why their currency is known as a Loonie!

Thu, 03/03/2016 - 10:06 | 7265399 Maplehood
Maplehood's picture

Damn, right when gold's chart can't get any more bullish!

http://www.goldsqueeze.com/home/golds-picture-perfect-consolidation-pattern

Thu, 03/03/2016 - 10:08 | 7265408 pillory-hillary
pillory-hillary's picture

Bring back the Maple Syrup Standard!

Thu, 03/03/2016 - 10:08 | 7265412 clooney_art
clooney_art's picture

Their true gold is Vancouver and Toronto housing sales to the Chinese.

Thu, 03/03/2016 - 10:10 | 7265424 hedgeless_horseman
hedgeless_horseman's picture

 

 

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.”

Better assets, like...?

Better in what ways?

Thu, 03/03/2016 - 10:11 | 7265436 Cognitive Dissonance
Cognitive Dissonance's picture

The new and improved barbarous relic.....fiat made from digital ones and zeros.

Thu, 03/03/2016 - 10:13 | 7265448 Keyser
Keyser's picture

Now they can load up on NFLX, FB and TSLA... What could go wrong? 

Thu, 03/03/2016 - 10:18 | 7265485 Father Thyme
Father Thyme's picture

Same as in Fort Knox.

Thu, 03/03/2016 - 10:24 | 7265534 Stuck on Zero
Stuck on Zero's picture

"Canada’s gold reserves belong to the Government of Canada ..."

Hell! The gold reserves belonged to the people of Canada.

Thu, 03/03/2016 - 10:34 | 7265608 two hoots
two hoots's picture

Gold is a "tender" subject on ZH. 

Thu, 03/03/2016 - 10:43 | 7265681 NidStyles
NidStyles's picture

Let me guess, they sold it to Israel...

Thu, 03/03/2016 - 10:56 | 7265747 Pinto Currency
Pinto Currency's picture

 

 

Just before gold really launches, of course a central planner would sell.

And, even if you don't respect gold as money, what can be better than a zero diversification strategy.

Well done.

Thu, 03/03/2016 - 11:17 | 7265891 VinceFostersGhost
VinceFostersGhost's picture

 

 

 

 

It's worse than we thought.....they also took the bar.

https://www.youtube.com/watch?v=BplarHcB0Es

Thu, 03/03/2016 - 11:23 | 7265934 Manthong
Manthong's picture

Well, at least the hosers have tar sands, eh?

Thu, 03/03/2016 - 11:38 | 7266023 Never One Roach
Never One Roach's picture

IT's always a wise financial strategy to Buy High and Sell Low, eh.

Thu, 03/03/2016 - 11:48 | 7266082 strannick
strannick's picture

traded the gold for a 3rd round draft pick, a bag of pucks, and some fiat

Thu, 03/03/2016 - 12:03 | 7266169 mtndds
mtndds's picture

Canada should not have gone FULL RETARD.

Thu, 03/03/2016 - 12:17 | 7266246 The Black Bishop
The Black Bishop's picture

This is indeed gone full retard! Whow! Norway did the same back in 2005/2006 on the basis that the gold was not giving any interest....LOL talk about having their head up their arse! Gold has NEVER been about dividends/interest rates. It is SECURITY for times like we are facing RIGHT FUCKING NOW!

Thu, 03/03/2016 - 12:24 | 7266293 CuttingEdge
CuttingEdge's picture

Damn.

I missed the celebrations when Gordon Brown emigrated.

Thu, 03/03/2016 - 12:31 | 7266328 Confused
Confused's picture

This is some kind of joke right? Opinions of gold aside, just from a general perspective, wouldnt it be at least wise to keep some of any particular asset? It would be interesting to see what trash currencies they are holding. 

Thu, 03/03/2016 - 12:36 | 7266354 espirit
espirit's picture

SDR's made from Rubles or Yuan?

Got Gold?

Thu, 03/03/2016 - 12:48 | 7266403 Pairadimes
Pairadimes's picture

You're supposed to be selling Goldman into strength right now, not gold, you idiots! Reread the memo.

Thu, 03/03/2016 - 13:03 | 7266495 MagicHandPuppet
MagicHandPuppet's picture

A fool and his money are soon parted.

Thu, 03/03/2016 - 13:15 | 7266553 The9thDoctor
The9thDoctor's picture

The 5-year gold chart still looks like shit.

Thu, 03/03/2016 - 13:30 | 7266605 Four chan
Four chan's picture

it's unofficial the usa has none of the peoles gold either. ft knox is empty and those who own the federal reserve have sold it. jew

Thu, 03/03/2016 - 13:54 | 7266715 The Black Bishop
The Black Bishop's picture

Seriously, who can read about Deep Storage Reserves and not chuckle? The entire system is smoke and mirrors, while the closet in the back is empty and collecting dust of the not so golden kind.

Thu, 03/03/2016 - 14:13 | 7266812 Save_America1st
Save_America1st's picture

Doesn't all of Canada and it's gold (above or below ground) belong to Queen E anyway???  Is that where the gold went or did it end up in China?

Thu, 03/03/2016 - 17:37 | 7267957 Automatic Choke
Automatic Choke's picture

's ok, they have lots of reserves in the ground.   time to nationalize the mines.

Thu, 03/03/2016 - 18:17 | 7268156 Son of Loki
Son of Loki's picture

<< Now they can load up on NFLX, FB and TSLA. >>

 

Herbalife ... Don't forget Herbalife!

Thu, 03/03/2016 - 13:55 | 7266727 nope-1004
nope-1004's picture

My belief is that this story is a lie.  The entire gold pricing mechanism is a lie, so why should a story such as this be truth?  Who in their right mind would want to sell all their gold NOW?

Thu, 03/03/2016 - 14:09 | 7266791 jcaz
jcaz's picture

No one ever sells all their gold because they WANT to......

Thu, 03/03/2016 - 15:39 | 7267291 turtle
Thu, 03/03/2016 - 14:12 | 7266805 Dame Ednas Possum
Dame Ednas Possum's picture

Who said anything about 'right minds'?

When you sell your soul to the devil... you keep dancing while he plays his fiddle.

Thu, 03/03/2016 - 20:49 | 7268915 buzzkillb
buzzkillb's picture

Venezuela?

Thu, 03/03/2016 - 12:26 | 7266305 Canadian Renegade
Canadian Renegade's picture

We went Full Retard long ago.

Thu, 03/03/2016 - 14:36 | 7266974 joe6px
joe6px's picture

And I thank you for all the maples, unfortunately I lost them in a canoeing accident.  With the number of waterway accidents suffered by ZH'ers you would think the government would force us to take a boating safety class.

Thu, 03/03/2016 - 16:17 | 7267510 Squid-puppets a...
Squid-puppets a-go-go's picture

w'ere too busy studying finance, economics, and mental health

Thu, 03/03/2016 - 20:51 | 7268926 Hulk
Hulk's picture

We call buying high and selling low "getting Leo'd" around these parts !!!

Thu, 03/03/2016 - 11:26 | 7265955 SuperRay
SuperRay's picture

Does this mean there'll be no more gold maple leafs available?  Love those little guys..

Thu, 03/03/2016 - 17:52 | 7268025 Bendromeda Strain
Bendromeda Strain's picture

With the Masonic Lizard on the inverse? No thanks... I would gladly trade my Maples and Roos cuz i can't stand the sight of her anymore.

Thu, 03/03/2016 - 11:38 | 7265978 manofthenorth
manofthenorth's picture

"Then in 1971, for lots of reasons I won’t get into, Richard Nixon took the United States off the gold standard.”

Yeah do not want to get into the fact that western governments have been bankrupt and insolvent for almost 50 years, that would be a pretty uncomfortable conversation for a scum bag lying Fin Min.

I would bet that the holdings in Ft.Knox are equal to the holdings in Canada.

Thu, 03/03/2016 - 11:55 | 7266125 greenskeeper carl
greenskeeper carl's picture

funny, i was thinking along similar lines

 

"The Government of Canada sold 21,851 ounces of gold coins for settlement in February. On February 29, gold holdings stood at 77 ounces."

 

thats 77 ounces more than we have at ft knox, so they are probably ahead of us.

Thu, 03/03/2016 - 13:31 | 7266624 Four chan
Four chan's picture

i own more gold than canada lol

Thu, 03/03/2016 - 13:34 | 7266637 Government need...
Government needs you to pay taxes's picture

You only own it if you can touch it whenever you like.

Thu, 03/03/2016 - 13:55 | 7266724 The Black Bishop
The Black Bishop's picture

Uncle Scrooge got it right! I love the feel of gold in the morning!

Thu, 03/03/2016 - 11:29 | 7265971 Poundsand
Poundsand's picture

I used to think it was governments selling gold for price control issues.  But all governments are now bankrupt.  To keep the music playing just a little longer, they start by liquidating their assets and because an asset is only valuable to today's economist if it produces a return (to be spent immediately) gold is not a valuable asset.  It has no return. 

Fortunately, there are bankers who will help them sell it, or better yet, buy it for them in bulk to save on costs.  The bankers are just trying to help.

Thu, 03/03/2016 - 14:13 | 7266815 ATM
ATM's picture

They don't need to sell gold to keep any music playing. They own a printing press.

My guess is they are being forced to sell the gold to someone or some country or have the music stop playing and be left without a chair.

Thu, 03/03/2016 - 14:49 | 7267049 Manthong
Manthong's picture

“they are being forced to sell the gold to someone or some country or have the music stop playing”

 

..heh.. heh.. keep in mind that the “teachers” are always yanking a chair out of the game.

 

Thu, 03/03/2016 - 16:04 | 7267454 unrulian
unrulian's picture

bingo

Thu, 03/03/2016 - 11:24 | 7265939 lincolnsteffens
lincolnsteffens's picture

Let me guess. They sold it to the Vatican. Fuck you NidStyless

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