First There Was “Brown’s Bottom,” Now Gold Gains On “Morneau’s Miscue”

‘Sooner or later, everybody sits down to a banquet of consequences’
– Robert Louis Stevenson
Gordon Brown, back when he was the UK Chancellor of the Exchequer, distinguished himself by selling off approximately one-half of Great Britain’s gold reserves at what turned out to be a near-bottom at the end of the secular bear market in gold which lasted from 1980 to 2000-ish. He will probably be remembered for this more than anything else he ever did, even as Prime Minister. He’ll be somewhat of a laughing stock because of it (gold now, even after a vicious near 5-year cyclical bear, worth a paltry 300% to 400% more than what England garnered from it’s sales). That chapter among those who pay attention to this sort of thing is affably called ‘The Brown Bottom’.
Two events recently converged in the news to create an analogous moment here in Canada:
1) the news that the new Finance Minister Bill Morneau has completed selling all remaining Government of Canada gold reserves. Canada, the 5th largest gold producer in the world, as a nation holds exactly zero ounces of gold as currency reserves.
2) Gold has resumed it’s secular bull market. This is something I have not been alone in anticipating, but it looks like Mr. Morneau has managed to pick off the exact end of the cyclical bear, selling just as the price of gold, driven by negative rates, impending bans on cash and generalized financial repression, is commencing lift off.

This post was published at Zero Hedge on 03/16/2016.