British Finance Minister George Osborne aims to capitalize on low interest rates in hopes of floating Britain through the current economic crisis — with gold bonds redeemable only after 100 years have passed.
The strategy is meant to ensure that the government receives the benefits of low interest rates while reducing Britain’s £1 trillion debt and providing stability for future generations.
Such long-term “gilts” were used to reconstruct England after World War I.
The duration of Britain’s current debt is around 14 years, with maturities ranging from mere months to 50-year bonds.
“This is about locking in for the future the tangible benefits of the safe haven status we have today,” a Treasury source told the Telegraph. “The prize is lower debt interest repayments for decades to come. … It is a chance for our great-grandchildren to pay less than they otherwise would have done because of the government’s fiscal credibility.”
Osborne will meet with officials next week to discuss the 100-year gilts. Plans for never-ending gilts are also on the list of topics.