The reason some countries hold on to gold may have little to do with sound fiscal policy. Instead, the practice reflects the less tangible or rational weight of history. A look at which countries own the metal — and which countries do not — presents an unexpected pattern. Countries that possess significant reserves tend to have some history as global hegemons, imperial powers or economic powerhouses — or aspirations to such status.
The U.S. remains No. 1, just as it remains the world’s biggest economy and the issuer of the most common reserve currency. But the pattern reaches into the distant past. The Netherlands was an imperial heavyweight in the 17th century, but it lost that status long ago. Nonetheless, it holds the 10th largest gold reserves, even though it has a population of only 17 million.
Portugal, a country that once possessed an empire that stretched from Brazil to Angola to Macau, has 382 tons of gold, yet only has a population of about 11 million. The better-known imperial powers — Germany, Italy, France, Russia, and of course, the U.K., all have gold holdings in the global top 20.
The trend extends beyond Europe. Japan, which sought to conquer much of the Pacific in the 20th century, and later became the world’s second-largest economy, is ranked No. 9 in gold holdings. Taiwan, which became an economic powerhouse in the second half of the 20th century, is ranked 14.
Canada has never harbored imperial ambitions of its own. And its policy makers have never felt a need to proclaim their greatness by accumulating piles of gold. As they would say to the rest of us who cling to this imperial relic: it’s all in your head.