Canada gives up gold for the US dollar - Canada Has Just 77 Ounces of Gold—or Less as Canadian government sells off reserves
The US holds about 8,133 metric tons of gold. That's 8,133 more than Canada, according to newly released data. The Canadian government sold off 21,851 ounces of gold in February, leaving it with just 77 ounces at most, reports Bloomberg. Those 77 ounces are worth about $100,000, but the official value of Canada's gold reserves is $0 because asset valuations are rounded to the nearest $1 million. That goose egg is actually a good thing in the government's perspective. Canada hoarded some 1,000 metric tons of gold in the 1960s but has been slowly selling it and stashing other countries' currencies instead. Canada holds $48.6 billion in US dollars and $22.5 billion in other currencies, reports the Globe and Mail.
"The government has a long-standing policy of diversifying its portfolio by selling physical commodities (such as gold) and instead investing in financial assets that are easily tradable and that have deep markets of buyers and sellers," a Finance Department rep tells the CBC. A former finance official adds that holding onto gold isn't economical because it hasn't had a good rate of return over the years and is costly to store. Clearly not everyone agrees: Russia, India, and China, are shoring up their reserves. Still, one professor suggests the only reason the US Federal Reserve isn't selling its gold is because "it knows it would get attacked in Congress." Indeed, Ted Cruz is a big fan and has suggested the US return to the gold standard, notes the Globe and Mail. (There's $10 million in gold and silver hidden in Utah.)Gold is a funny thing; aside from jewelry, and a few industrial uses, for which a small amount usually suffices, it has no intrinsic value. And yet countries and wealthy people hoard it far in excess of the amounts needed for those functions, because to people it has become the symbol of wealth. When the money goes to pot (and it usually does after a long period, because politicians are fickle about paying their bills), gold still retains its value. And that is the reason to hoard gold.
In the short run, Canada has probably made a reasonable choice. If worst comes to worst, and it usually does in the long run, they may regret it.
It's a little ironic that Canada has given up owning gold, but is willing to sell gold coins.