Back in the 1960s, Canada held more than 1,000 tonnes of gold. But it began steadily selling off its hoard, and by 2003, the country had just 3.4 tonnes. Now, Canada has less than one tonne. (CBC News – a division of the Canadian Broadcasting Corporation)
Contrary to the recent “Pet Rock” theories, gold is perhaps the most liquid asset in the world next to Treasuries. When an entity is reduced to selling assets as a last resort like this, it’s analogous to a household having to burn its furniture in the winter in order to heat the house.
Somewhat reminds me of when the Bank of England dumped half of its gold reserves at the bottom of the 1981 – 2000 gold bear market, marking the beginning the current secular bull market in precious metals.