Benn Steil

Geo-Graphics

A graphical take on geoeconomic issues, with links to the news and expert commentary.

BRIC’s Dollar Assets

by Friday, May 29, 2009

bricfx3

Brazil, Russia, India, and China have increased their holdings of foreign exchange reserves significantly over the last decade. But China stands out when it comes to financing the United States. China’s holdings of U.S. financial assets have increased dramatically since 2000. Brazil and Russia have also significantly increased their holdings of U.S. financial assets, but their aggregate increase is still small relative to that of China’s. Read more »

Fed’s Exit Strategy

by Friday, May 22, 2009

fedbalancesheet

Some assets on the Fed’s balance sheet are short-term credits than could be withdrawn easily if confidence in financial institutions returns, but the Fed has also been buying longer term assets that are harder to unwind. Should the Fed keep buying assets to signal its determination to fight deflation, or does the Fed need to think about how to unwind some of the programs to demonstrate that the expansion of its balance sheet won’t lead to inflation? Read more »

China’s Foreign Assets

by Friday, May 15, 2009

China’s total foreign assets, including its dollar assets, have grown substantially. China is worried about the risks associated with holding large amounts of dollar assets, as evidenced by its call for a new global reserve currency. Is it appropriate for so much of a poor country’s national wealth to be invested in a rich country’s low yielding assets? And what risks does the U.S. run by relying heavily on a single country’s government for financing? Read more »