Canada Has No Gold But A Mountain Of Debt… Things Will End Badly
by Alex Deluce via GoldTelegraph.com,
ZeroHedge.com
Thu, 04/26/2018
While other central banks have been busy increasing their gold reserves, Canada sold off all its gold reserves in 2016. The Bank of Canada ranks last globally out of 100 major central banks.
There is precedence in a central bank selling off its gold, and it didn’t work out very well. In 1999, when the price of gold was low at $282.40 an ounce, the United Kingdom sold half of its gold reserves, worth approximately $6.5 billion. The sale raised $3.5 billion. By 2007, the price of gold had risen to $675.00 an ounce, and the UK had lost more than £2 billion. This financial disaster, known as Brown’s Bottom, did not work out well. And Canada appears to be following in its footsteps.
With many uncertainties globally, Canada’s gold sale could have serious consequences.
In this age of fiat currency, many people forget that gold is actually money, and has never stopped from functioning as a reliable store of value. Gold is a relatively liquid currency and one of the most highly traded.
According to Canada’s senior Finance Department economist Morneau, the reason for the gold sale was the cost involved in storing the gold and the fact that gold offers a poor return. That seems like strange logic since gold has outperformed the S&P 500 since 2000. The price of gold went from $35.00 an ounce in 1967 to over $1,300 today.
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