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Wednesday, June 03, 2009

Does Canada have enough gold?

Gold Canada’s Official International Reserves Report released today for the period May reveals that Canada has US$106 million in gold reserves.

On May 29th, the nation’s gold holdings stood at 0.1 million ounces. The valuation above is based on the May 29th gold price of US$976 per ounce.

While sound money advocates would normally prefer to measure gold reserves in ounces, and not in US dollar-denominated value, here’s a ten year analysis of Canada’s gold reserves represented in millions of US dollars:

December 31, 2008:  95
December 31, 2007:  91
December 31, 2006:  69 
December 31, 2005:  56
December 31, 2004:  48
December 31, 2003:  45
December 31, 2002:  205
December 31, 2001:  291
December 31, 2000:  323
December 31, 1999:  524
December 31, 1998:  122

Canada’s high-water mark over the last decade for gold reserves was 1999. The value of the gold at that time was US$524 million.

Posted by Matthew Johnston

Posted by westernstandard on June 3, 2009 | Permalink


Does Canada have enough gold reserves?
Posted by Matthew Johnston

What's enough? $1 billion? $5 billion? $100 billion?

If they did have a couple of billion in gold reserves you'd be calling on them to sell it and pay down the debt. Since we are not on the gold standard why should the government have any gold at all.

Posted by: The Stig | 2009-06-03 12:49:12 PM

Interesting question Stig. Why do people hold on to gold? Why is China currently buying gold?

Posted by: Charles | 2009-06-03 1:16:19 PM

Why is China currently buying gold?
Posted by: Charles | 2009-06-03 1:16:19 PM

China is buying up just about anything that will retain value. Currently China's gold reserves are around 1% of its total foreign reserves ($2 trillion). China's biggest problem is the long term value of the US dollar.

Posted by: The Stig | 2009-06-03 1:45:57 PM

"China's biggest problem is the long term value of the US dollar."

To a greater or lesser extend, Stig, isn't that everybody's problem?

Posted by: Matthew Johnston | 2009-06-03 1:52:19 PM

To a greater or lesser extend, Stig, isn't that everybody's problem?
Posted by: Matthew Johnston | 2009-06-03 1:52:19 PM

Quite possibly, though most others are more diversified into other financial instruments than China is.

Posted by: The Stig | 2009-06-03 2:47:53 PM

To answer the threads question; NO!

Then again no nation with a fiat currency debt-issue system has enough gold to back tender circulation or leans issued by banks.

Posted by: voltaire's bastard | 2009-06-03 6:30:10 PM

We should sell all our gold.

We've got oil so who the hell needs gold.

Posted by: epsilon | 2009-06-03 9:10:21 PM

Who's "we," Epsilon?

Private individuals should own gold as a store of value in crisis and inflation. Unless you've got an oil well somewhere, you should to.

Posted by: Matthew Johnston | 2009-06-04 12:32:54 AM

Canada doesn't need a gold reserve, or any strategic reserves for that matter (petroleum, hard currency, etc.) because of the uniquely diverse and secure nature of our economy (abundant resources, large diverse industrial base, negligible value of trade besides with the US)... but it's very much in our interest to promote the probably-correct idea that other countries *should* build up their reserves, since it raises the price of gold. This is why Canada opposes gold sales by other sovereign reserves and the IMF. Russia is going even further, for the same reasons, in promoting a new gold standard (will never happen, nor should it).

Posted by: stewacide | 2009-06-09 7:38:50 PM

Sorry Matts, gold has no utility other than for some IT hardware uses. Its days as a store of wealth are long past. If I own USD or Euros I can at least exchange goods. Who in the Christ is going to accept a gold ingot in exchange for goods? It is absolutely ludicrous! This is not the Middle Ages anymore.

Gold died decades ago.

Posted by: epsilon | 2009-06-10 10:47:01 PM

I'll take gold in exchange...its always useful for artisans to make jewelry and toys-- thats how golds value started.. its pretty, and easy to work and doesn't tarnish..gold looks good against human skin, way nicer than zinc...

scuba divers will never salvage a shipwreck to get Euros..

Posted by: 419 | 2009-06-10 11:16:41 PM

epsilon----hahahaha. What meat head. You hold on to dollars, I'll hold on to gold , we'll see what happens in 2-3 years.
The only reason canadian dollar will be ok is because we have natural resources that the world needs. More and more people arrive on this planet every day and more resources are needed.Simple as that..

Posted by: what goes around | 2009-10-26 5:19:51 PM

@epsilon: This has to the be the studiest comments I have ever read!

I am ashamed that Canada (under the liberals) sold off our $500 million Gold reserve and countries like India and Russia are stocking up.

PS: If you are going to hang on to paper, I would suggest the CAD over USD anyday.

Posted by: Amar | 2009-11-24 4:09:04 AM

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