Gold — the original Bitcoin —  may also be the proverbial canary in the coal mine.

Like Bitcoin, gold exists in finite quantities. It requires considerable time, capital and resources to find and extract in significant quantities. Gold is fungible, can be held anonymously, and is perceived as both a haven and a currency, particularly in uncertain times.

Gold is also an investible asset which for the last 20 years has outperformed the Dow Jones Industrial Average, the S&P 500 Index, and the Nasdaq Composite.

I do not know what the future holds for gold but one thing is for sure: it is now “Print More” season in the United States. The large quantities of new US dollars being produced at the touch of a button risk eroding its position as the world’s reserve currency and the privileges that go with such a position, including the privilege of overspending.

Most governments have increased spending to confront Covid-19 but the US has spent substantially more in absolute and relative terms than any other country. The current philosophy going forward is to spend as much as is required. This mountain of new dollars will have an impact on the economies of the US and its trading partners. Perhaps the recent rapid rise in gold prices (and US dollar denominated stocks) is an early indication of what is to follow: inflation.

The recent surge in the price of gold should be good for Quebec’s gold sector. According to Quebec’s Ministère des ressources naturelles, the province is Canada’s second producer of gold after Ontario. Quebec produces nearly 2% of the world’s yearly output. China leads the way with 12%, followed by Australia at 10%. Canada and the United States each produce about 6%.

There are ten gold mines in production in Quebec, seven in Abitibi-Temiscamingue, an area close to Ontario, and three more in Northern Quebec. Exploration continues apace with gold being the most sought after mineral substance in Quebec.

The short and medium outlook for gold appears good. Let’s hope that this good news does not portend difficult times for other sectors of the economy. Let’s also hope that Quebec’s pension funds are adequately invested in this sector.