Sunday, August 7, 2011

Where have all the dollars gone? Look East, young man/woman. Nice graphics showing the flow of dollars since 1991...

A nation's stock of Foreign Currency Reserves is one way you can look at patterns of trade. The more a nation holds of a particular foreign currency, oh, say, dollars, is another way of saying that nation sells more ''stuff" than it buys from the other nation, oh, say, the US.  Hence, they are net holders of dollars.  China holds currencies other than dollars, but the perponderance of the reserves are US dollars.

This interactive from the Financial Times shows an amazing transition of foreign currency holdings just since 1991.  In the 2000's there is a massive tilt in one direction.  What to do with all those dollars? Well, we know at least one place it ends up...




 Well, we know at least one place it ends up...

Economix

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