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China’s Foreign Exchange Reserves May Surpass $2 Trillion

There’s something legendary investor Jim Rogers said in a TIME magazine interview back in April that reinforced my belief that the global financial system is witnessing a major shift in influence away from the United States. Rogers told the interviewer:

“Well, again, throughout history, the center of the world has shifted to where the capital is, where the assets are. You don’t see any period in history where things are shifting to the debtors, and America’s the largest debtor nation in the history of the world. Unless something’s different this time, unless the world’s changed very very dramatically, the center of the influence, the center of power, the center of the earth, the center of the globe, is going to be shifting towards Asia, because that’s where all the money is. Have you ever heard of anybody saying, ‘Let’s go to where all of the debtors are’? It just doesn’t happen that way.”

And these days, it appears all the money is in China. From Bloomberg staff today:

China’s foreign-exchange reserves probably topped $2 trillion for the first time, drawing attention to the difficulty the government faces in finding places to invest the world’s largest holdings.

The reserves climbed $67.8 billion to $2.022 trillion as of June 30 from three months earlier, according to the median estimate of six economists surveyed by Bloomberg News.

That would compare with a $7.7 billion gain in the previous quarter. The central bank may release the number today or next week, based on the timing of previous announcements.

Source:

“China’s Currency Reserves May Top $2 Trillion for First Time”
Bloomberg, July 9, 2009