Stolen Gold and Pitchforks: The Curious Case of the Bank of Canada

Stolen Gold and Pitchforks: The Curious Case of the Bank of Canada

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I have titled this post Bank of Canada, stolen gold and pitchforks, because I believe that when Canadian citizens began to understand that we have been robbed of our rightful due, there will be pitchforks. What is our rightful due?  A truly national bank, one that serves the public good, not just the rich and powerful.  But pitchforks? Not literally, of course, a pitchfork would be almost as hard to find in an ordinary urban setting as some of our stolen national treasury. I think Canadians in general to be better educated than Americans and more adapt at spotting lies that our government tells us.  And I think our government has told us some whoppers about the sell off of our treasury gold.

Yes, I know, Canada went off the gold standard in 1929 along with the US and  most other countries following suit in the years after.  But this didn’t, and doesn’t, mean that having gold in national treasuries no longer matters to national currencies. Even famous US former Federal chairman Alan Greenspan has said :”Gold still represents the ultimate form of payment in the world.  Fiat money in extremis is excepted by nobody.  Gold is always accepted”.

From the Gold Telegraph  (April 25, 2018): “ 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.  And some of the reasons given by our supposed guardians of our national treasury explains as follows. Finance Dept. spokesman David Barnabe wrote to CBC news “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 has deep markets of buyers and sellers”. This at a time when gold prices were steadily rising and outperforming other markets.   According  to Finance Minister Bill Morneau, one of  the reasons for the  sale was that gold offered a poor return. He was echoed by other Canadian experts (Don Drummond comes to mind, a previous Finance Department economist), who said it made no sense to have gold in the treasury.

In 1971 spot  gold was US$35 /ounce. Today it has already reached US$2000/ ounce, pulled back but is poised to make another run for the US$2/ounce  Just exactly what kind of returns did Bill Morneau have in mind?  Canada has gold mines but none of this gold is finding its way into our treasury.  And the government, would you believe, is also selling off the gold mines.  But at least we know who they are selling them to.  Next time.