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Monday, November 12, 2012

Bundesbank Obfuscator President Weidmann: "Our gold is kept safely" - Interview

Ex-IMF Weidmann steps forward to insulate his private bankers from harm in true Conspiratorial style. Everyone else can sip thin gruel. See our German Bundesbank: Co-conspirator in US Federal Reserve's Gold Heist

Weidmann: "Unser Gold wird sicher verwahrt"

BY A. AND M. Hoening BROECKER - last updated: 10.11.2012 - 09:08
Dusseldorf / Frankfurt (RPO). Bundesbank President Jens Weidmann speaks to our editorial about inflation risks, the German foreign overlapping gold and relief operations for the faltering Greece.
On Monday advised the Treasury on new aid for Greece. Should flow to help, even though the country is actually economically at the end?
Weidmann Politics has apparently decided to finance Greece. However, subsidies should only flow if the troika, that the experts of the European Central Bank, IMF and EU find that the country can carry on its debt duration and implement the agreed reforms. And this judgment is pending.
Many experts see no light at the end of the tunnel?
Weidmann Method There: Is it the lack of will to reform or to external influences, that the situation in Greece is worse than expected? It is clear that aids only make sense if Greece is doing enough themselves. This is not only a very important signal for Greece, but also for the other crisis countries. The pressure for reform in Europe must be maintained, otherwise barely moves a little and the euro-zone slides into a transfer union. Then the stability of the monetary union would be in danger.
Jens Weidmann
The President of the Bundesbank, was born in 1968 in Solingen. He studied economics in Bonn and Paris, worked for the International Monetary Fund and was an adviser to the Chancellor. 2011 Weidmann became the youngest president of the Bundesbank.
The German Bundesbank, the Bank is the bank of banks. It ensures the cash supply in Germany and designed with the Euro monetary policy. It has 10 000 employees nationwide.
If the troika report at all, regardless if the policy-makers have expressed so clearly?
Weidmann This is indeed a problem. How can one evaluate the program performance objectively, if the consequences of an adverse judgment too shy? I am confident that the situation in Greece, the troika nevertheless unvarnished and honest review before it comes to payments.
The Greeks have experienced several pension cuts in three years, which would have to trust a German government once ...
Weidmann is true that in the meantime measures have been adopted which recently were still hard to imagine. I see very well how hard it is for those affected. But Greece is not around to extensive cuts and without the extensive support the cuts were much deeper.
Private banks and insurance companies have been granted debt Athens. Would not it be fair if now the public creditors take a haircut?
Weidmann, the states and the central banks of the Eurosystem have become during the crisis and to help Greece's creditors - and not before the crisis limps from a yield calculation as banking and insurance, the comparison so. In any case, the following applies: The central banks may not cancel the debts of Greece, which would be a direct transfer and would therefore a prohibited monetary state financing equal.
Is it true that the ECB is the largest creditor of Greece?
Weidmann The Euro system - ie the ECB and the national central banks - has acquired a significant extent in Greek bonds, making it one of the largest creditors. This has not solved the problems of Greece. Instead, we now have a discussion on the contribution of the Eurosystem on a haircut. All this confirms the concerns that the Bundesbank had from the beginning.
Would not it be more honest, at least when the states to give up their claims?
Weidmann A haircut alone does not solve a problem. What it helps to adopt Athens debt if the country in ten years at the same point as it is today? Greece must reform fundamentally, to become competitive and to achieve the objective permanently sustainable public finances. Only then can really help a haircut.

Greece is in ten years of the euro? Is there then the euro at all?
Weidmann the euro there will be ten years from now, I'm sure. Quite obviously, there is the political will to keep the euro zone as a whole. But this has consequences. Thus, the monetary union is a stable community, the rules changed and the individual countries are taken on economic and financial policy more on a leash. The fiscal pact is a first step in this direction.
ECB President Mario Draghi will do anything to save the euro. Do you?
Weidmann We are all in the Governing Council to fight for the long-term success of the euro as a stable currency. We struggle for the right way, how do we do our part to combat the crisis in the context of our mandate to safeguard the value of money? We are in the Governing Council agreed that the crisis countries, we can buy our measures only time. The origins of the crisis can only eliminate the policy.

The Governing Council is the only you voted against the unlimited purchase of government bonds from countries in crisis ...
Weidmann ... because I see a growing concern that the euro system is drawn further and further into the scope of fiscal policy. For this we are not democratically legitimized. Also takes the pressure for action by governments, and the reforming zeal threatens to weaken.  

Although the new government bond purchase program strict conditionality has been decided, but their binding force has yet to prove itself. Basically, monetary policy must not fall into the wake of the fiscal policy. Experience teaches that independence for a central bank is crucial to keep the value of money stable.

It said that you had threatened to resign ...
Weidmann I have not threatened to resign. When I assumed the position, I knew what to expect. What would have been a withdrawal as well? A successor who will like me for the culture of stability, the Bundesbank would be, but now in the same situation and would also answer your question about retirement rumors.
Do you feel your former boss, the Chancellor abandoned?
Weidmann So I do not see it. The interests and responsibilities of government and central bank are not always the same. We need a central bank have our own compass and should not rely on the help of politics.
The CSU and the FDP request, Germany could not just have one of 23 votes in the Governing Council, but must have 27 percent of its shares of the vote. A sensible proposal?
Weidmann The idea behind the rule, one country, one vote 'is that the members of the Governing Council not pursue national interests, but also on a European level, and that we have a largely risk-free monetary policy. The more we weaken the latter and redistribute by our actions in the crisis risks between national taxpayers, the more the public of the voting power is questioned. The right answer is not to change the weighting of votes, but return to a narrowly defined money back policy.
Many fear that the ECB and the Italian crisis is always paid on time with inflation. See also this danger?
Weidmann Italian, German - this debate leads in the wrong direction. It is important that the problems in each country to be solved and that the whole monetary union gets a sturdy frame, so that monetary policy can again focus on their primary responsibilities.
You can citizens take the fear of inflation?
Weidmann Immediately no cause for worry is against higher inflation. Many European countries stuck in recession, and the world economy is no longer growing so strongly. This dampens the price rise. For Germany, the Bundesbank expects no more than two per cent inflation in the coming year. Longer term, we still need to be extremely vigilant. Technically, the Governing Council is always in a position to scale back the expansionary monetary policy. But we must also have the political power.
During the crisis, the citizens discover gold. How safe is the Bundesbank's gold?
Weidmann Our gold is kept in safe deposits. A portion is located in Frankfurt, and we will store gold abroad at partner banks, to whom we have a long and trusting relationships. They confirm the stocks regularly just to the ounce.
The Court is located not so sure ...
Weidmann with the Court, we have discussed only the type of inventory. Although we do not only, but also our auditors and their association our approach is correct, we come to the wishes of the Court against far. To confirm the quality of the gold, we will melt some and taken to Germany. We also extend our audit measures on foreign deposits. The President of the Court has made it clear that he is happy with it.
Why the Bundesbank their gold has ever abroad?
Weidmann Our gold reserves have two functions: they are to secure confidence in the currency, and they are designed to allow any time to obtain foreign exchange. Forex trading courses are mainly in New York and London, but not just Frankfurt. Therefore, we leave a part of our gold store abroad.
M any investors value gold as a supposedly safe haven. Hold Gold?
Bundesbank President Weidmann For there are strict rules, they may choose which assets to eliminate any conflict of interest. Imagine, I personally would buy gold and simultaneously decide as Bundesbank president an increase of our gold reserves ...
The United States has re-elected President Barack Obama. Is that good for Europe?
Weidmann, we in Europe have to solve our own problems. Allen is served if everyone brings his own house in order.
Ensures the impending fiscal cliff in the U.S., so the automatic austerity that threatens the U.S., if the parties can not agree on the next budget?
Weidmann I am confident that the Republicans and Democrats are a few at the end, so that there are no abrupt cuts. The longer can wait for agreement on, the more there is a growing unrest. That slows down the investment in the U.S. and weaken the already sluggish global economy. On the other hand it is clear that the U.S. needs to get its debt under control quickly. Consolidation is inevitable.
In Germany wants the black-yellow coalition to present a balanced budget by 2014. Is that realistic?
Weidmann That's a reasonable goal, its implementation is not yet secured. Some decisions of the recent coalition summit point rather in the opposite direction. We should appreciate the importance of sound public finances is not low. Less debt today means less expense for our children.
Antje Höning and Michael Brocker led the conversation