LecteurOpportunity cost: Canada traded a safe-haven asset for paper bonds - JUNK US DEBT 👌
John Francis 🇨🇦🦫🍁💪⬆️@lecteur I don't think Canada had $149B in gold in 1965. Maybe $149M ?
Gold holdings don't pay interest, and there are considerable costs to storing and securing it.
If Canada has a trade surplus with the US, as is often the case, that means that Canadian central bank, commercial banks, firms are accumulating USD. Can sell it for CAD, driving up the value of CAD. Can sell it for gold, awkward to hold. Or sell it for a US federal bond, guaranteed to pay interest+principal. Not exactly junk.
The 1,023 tonnes of gold held by the Canadian government in 1965 was worth approximately US$1.155 billion at the time.
This valuation is based on the fixed gold price of the Bretton Woods era, which was US$35.13 per troy ounce in 1965 .
Yield matters, but gold offer stability and sovereignty...USD has become an us financial weapon and lost 90% of his power...with 39T of debt it's far riskier than holding a less liquid and non productive asset !
