Since 2010, central banks around the world have been stocking up on gold, recently at an accelerated pace. But Canada continues to shun the trend, writes Frank Giustra.
Gold is money, full stop. It’s not a shiny pet rock, as the crypto crowd might want to believe. And it’s not some antique instrument that no longer serves a purpose in this new digital world.
It has been used as money for thousands of years and while paper currencies have all come and gone (mostly to zero), gold has always retained its value. For that reason, the central bank of almost every country in the world owns gold — some more than others — as part of their foreign exchange reserves.
Almost every country that is, except Canada. Canada sold all of its gold holdings over the past 20 years, mostly at rock bottom prices in the early 2000s, much to the astonishment of the “hard-money” crowd and almost anyone who has read a book on economic history.
In a May 2022 interview with Kitco news, former Bank of Canada (BoC) Gov. David Dodge explained the reasoning behind the bank’s decision to off-load its gold holdings. “The issue is quite clear, that it costs to hold gold, whereas holding U.S. or Chinese or Euro bonds yields you a return,” said Dodge.
For the rest of this article: https://www.thestar.com/business/opinion/2022/11/11/canada-should-rebuild-the-gold-reserves-it-sold-off-in-the-2000s-while-the-us-dollar-is-strong.html