April 04, 2006
Trends in Dollar Reserves
The IMF has released its most recent data on reserve holdings in its COFER database. No big surprises in the data, at least relative to my previous post on this subject. The US dollar (USD) share in total reserves (both those known and unknown in currency composition)is trending downward from a peak in 2001q1, stabilizing in 2005.
Source: Shares from IMF COFER database, March 31, 2006, and dollar index from Fed (via St. Louis Fed FREDII).
The problem with this interpretation is that the "unallocated share" -- the amount of currencies reported in the IMF's International Financial Statistics but not by reporting central banks -- is rising. Under the presumption that most of these reserves are in dollars, the green line represents the upper bound for the dollar share. In this case, the dollar share has been fairly constant, and indeed has been rising slightly since 2004q4. In all these comparisons, valuation issues have to be kept in mind. The dollar rose in value during 2005 (the blue line is the Fed's nominal dollar index (against other major currencies). Hence, the upper bound of the quantity share of dollars in total reserves might have declined (the dollar index rose by about 5% over 2005, while the upper bound of dollar value share of reserves rose by about 2 percentage points).
For speculation on longer term prospects for the dollar, see this paper by myself and Jeffrey Frankel.
Posted by Menzie Chinn at April 4, 2006 07:47 AMdigg this | reddit
menzie --nice find!
Posted by: bsetser at April 4, 2006 02:04 PM
How many economists "speculate" with money from their own bank account?
Posted by: amam at April 5, 2006 08:55 PM
If u see these video, you will know what is happening around u, and be well informed how we all with us the world has been cheated by the IMF and the FED RESERVE, Please watch this and find out the reality. Find out where the collected USA Gold disappeared from fort Knox?
You will know the actual money will not evaporate but change hands, you will know that u do not need taxes. u will know that the fractional reserve banking makes money from thin air, their profit is 90%, this will make the government and the people poorer by day. Have u heard a book called THE EMPIRE OF DEBT? that what the America is now.
Please watch this video it opened my eyes:
The Money Masters - How International Bankers Gained Control of America - Part1 (Fixed Audio
The Money Masters - How International Bankers Gained Control of America - Part2
The Money Masters - How International Bankers Gained Control of America - Part3
Or learn more about the documentory and/or order DVDs at: http://www.themoneymasters
Posted by: amsaar at April 16, 2006 08:44 AM