Bundesbank wants to keep its gold hoard
The Bundesbank guards the second largest gold reserve in the world. The German government cannot rely on selling gold to fill the empty coffers, stated President Nagel. Instead, he offered some tips on pension policy for the coalition.
German Finance Minister Christian Lindner cannot count on the German Federal Reserve Bank for financial assistance. Federal Reserve Bank President Joachim Nagel told the "Tagesspiegel" that no Bundesbank gold would be sold. "Except for small quantities for collector coins, we do not sell anything," emphasized the central banker. "Gold is a trust anchor and has a high symbolic value for the population." Considering the long-term development of the gold price, it was right "that we have held the gold permanently." The German Federal Reserve Bank holds around 3350 tons of gold and ranks second in the world in gold reserves after the USA.
There is no prospect of a Bundesbank profit for the FDP politician for the foreseeable future. The Federal Reserve Bank made a loss of 21 billion euros last year. "When inflation was too low, we bought low-yielding bonds for monetary policy reasons," Nagel said. Now, however, interest rates have risen, resulting in losses in our balance sheet. "The finance minister will probably have to do without Bundesbank dividends for several years," predicted the Bundesbank chief. However, there will be profits again in the future. "The Bundesbank's balance sheet is solid," Nagel said.
Nagel also offered help in the form of good advice for the federal government. Nagel called for reforms in pensions to respond to demographic changes. The Bundesbank assumes "that we cannot maintain our prosperity in an aging society without changes," said Nagel to the newspaper. The pension at 63 encourages early retirement, criticized the Bundesbank president. Given demographic prospects, it is important to mobilize labor forces. "I also believe that it is appropriate to take into account the rising life expectancy in the statutory pension age," emphasized Nagel. "Politically unpopular as it may be, but I believe that reforms are necessary in this area."
Retirees and pensioners should also be encouraged to continue working, demanded the Bundesbank president further. "We must fundamentally ensure that all people who want to work can do so," he urged. To achieve this, childcare services need to be expanded, and provisions for foreign skilled workers must be made. Germany must remain attractive for foreign skilled workers, "otherwise we will not be able to fill the skills gap," said Nagel.
The current gold price plays a significant role in the Bundesbank's gold reserves, maintaining their value. Despite economic challenges, the Bundesbank sees merit in maintaining its gold reserves, viewing it as a symbol of trust. The German economy may need to consider pension policy adjustments to counteract the impact of demographic change, as suggested by President Nagel. Retirement at 63 could potentially contribute to an early retirement trend, which might necessitate changes in pension policy.
