Recently Zero Hedge did an expose on the increase of FX reserves held by China. The main hypothesis portrayed is that the increase in these reserves might be a function of a “stealth” quantitative easing. While it is functionally impossible to disprove this theory, this article first takes a look at the rise in reserves and then takes a closer look at the original source of the data, the quarterly Treasury Bulletin.
The period in question for analysis of the reserves comes into play in the period between September 1st, 2008 and October 1st, 2009. What should be noted during this period is that between September 1st to March 31st, there were a series of currency swaps established by the People’s Bank of China (PBOC) and several nations, including Japan (USD $29.3 Billion), Malaysia ($11.7 Billion), Belarus ($2.9 Billion), Argentina ($10.25 Billion), South Korea ($26.3 Billion), and Indonesia ($14.7 Billion).
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See Also:
- The Federal Reserve Subsumes Washington, As Everything Turns Into An Extension Of Bernanke’s Quantitative Easing
- Bernanke Tips Hand On FED’s MBS Purchases: More Quantitative Easing Straight Ahead
- Japan Preparing To Launch Quantitative Easing; What Are Three Lost Decades Among Hyperdeflationary Friends?