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Holding on to cash reserves seems like a smart move for any government. People will applaud private companies and investors holding decent chunks of cash so the

Holding on to cash reserves seems like a smart move for any government. People will applaud private companies and investors holding decent chunks of cash so they can invest into economic dips and crashes, and we have watched many countries borrow huge amounts to alleviate economic downturns, but a government holding money to either invest into or diminish an economic downturn is suppose to be bad? If the opposite happened everyone would be freaking out about how bad China is playing with fire that will hurt the global economy by holding too much debt. And if they held the account books even everyone would complain how they are either not leveraging debts to invest in the economy or complaining how they are unprepared for an economic downturn. To me it just reads "China bad because China."

woodruffw 3y ago
The article is about undisclosed foreign reserves, not any foreign reserves. There’s general consensus among economists and political scientists that maintaining foreign reserves is both good for countries and for global peace, but that really only works if everybody knows you’re doing it[1]. In other words: it’s easier to think of untoward reasons for hiding foreign reserves than honest ones. That’s why there’s a story here, not “China bad.” [1]: https://youtu.be/aLQCwVkhFvM https://youtu.be/aLQCwVkhFvM
- deleted 3y ago
  [deleted]
- candiodari 3y ago
  The article is about a foreign country loaning foreign currency to other foreign governments. That, most definitely, does not contribute to world peace or stability.
  - scotty79 3y ago
    > That, most definitely, does not contribute to world peace or stability. Why not? Dependency makes peace more probable.
    - peteradio 3y ago
      For roughly equal powers and if its bidirectional, maybe.
      - scotty79 3y ago
        Even in cases of hugely unequal powers it's a stabilizing factor. US stabilizes so many countries by making them dependent.
        candiodari 3y ago
        And while I don't subscribe to the idea of US exceptionalism, in this particular case the US really is exceptional. Historically, international debts were cause for invasion or colonization, and that seems to be repeating with China.
        scotty79 3y ago
        US is exceptional, but only due to its strength which is the result of it spinning up its economy during WWII and suffering none of the devastation that all of the old powers suffered. US is clipping coupons ever since, still operating on semi-wartime economy that needs an enemy to justify its existence. But after those few decades, cracks started showing. Worst tragedy is that US thinks it's exceptional and successful because of how it does all the things and is afraid to change anything about it. Even in areas where clearly superior solutions exist and were already adopted by virtual entirety of the civilized world.
        peteradio 3y ago
        I wouldn't go so far as to say its a sufficient condition right? Is it perhaps necessary? Maybe. Ideally I think we would not force "improvement" on other countries. But if we are, at least set them up for success. I'm not going to comment on whether USA has made good on this in the last 100 years, its worthy goal for any country I suppose. I think people are lazy and if they can do nothing and a country is taken advantage of for their benefit, well they will do nothin.
- spaceman_2020 3y ago
  Why would any country in a remotely adversarial relationship with America disclose their foreign reserves, especially in USD and EURO after what they did to Russia’s reserves? Just means that anything the country does against western interests will get their known reserves frozen.
  - eunos 3y ago
    That aside China already built this hidden reserve since early 2000s when relationship was still excellent.
  - woodruffw 3y ago
    > Why would any country in a remotely adversarial relationship with America disclose their foreign reserves, especially in USD and EURO after what they did to Russia’s reserves? For one: failing to disclose foreign reserves makes a relationship more adversarial, not less adversarial. For another: why are we assuming that China's foreign reserves are in banks that the US controls, or can otherwise curtail access to? The situation with Russia is instructive: CBR claimed to have around 50% of its reserves in US or EU institutions, but only a tiny fraction of that has actually been found[1]. It's much more likely that China, like Russia, is keeping the majority of its reserves in home (or friendly nation) banks. [1]: https://www.intellinews.com/the-eu-can-t-find-most-of-russia-s-300bn-of-frozen-reserves-271253 https://www.intellinews.com/the-eu-can-t-find-most-of-russia...
  - nonethewiser 3y ago
    > Why would any country in a remotely adversarial relationship with America disclose their foreign reserves Yes - that's the point. It shows intentions against US interests.

woodruffw 3y ago

The article is about undisclosed foreign reserves, not any foreign reserves. There’s general consensus among economists and political scientists that maintaining foreign reserves is both good for countries and for global peace, but that really only works if everybody knows you’re doing it[1]. In other words: it’s easier to think of untoward reasons for hiding foreign reserves than honest ones. That’s why there’s a story here, not “China bad.” [1]: https://youtu.be/aLQCwVkhFvM https://youtu.be/aLQCwVkhFvM

deleted 3y ago
[deleted]
candiodari 3y ago
The article is about a foreign country loaning foreign currency to other foreign governments. That, most definitely, does not contribute to world peace or stability.
- scotty79 3y ago
  > That, most definitely, does not contribute to world peace or stability. Why not? Dependency makes peace more probable.
  - peteradio 3y ago
    For roughly equal powers and if its bidirectional, maybe.
    - scotty79 3y ago
      Even in cases of hugely unequal powers it's a stabilizing factor. US stabilizes so many countries by making them dependent.
      - candiodari 3y ago
        And while I don't subscribe to the idea of US exceptionalism, in this particular case the US really is exceptional. Historically, international debts were cause for invasion or colonization, and that seems to be repeating with China.
        scotty79 3y ago
        US is exceptional, but only due to its strength which is the result of it spinning up its economy during WWII and suffering none of the devastation that all of the old powers suffered. US is clipping coupons ever since, still operating on semi-wartime economy that needs an enemy to justify its existence. But after those few decades, cracks started showing. Worst tragedy is that US thinks it's exceptional and successful because of how it does all the things and is afraid to change anything about it. Even in areas where clearly superior solutions exist and were already adopted by virtual entirety of the civilized world.
      - peteradio 3y ago
        I wouldn't go so far as to say its a sufficient condition right? Is it perhaps necessary? Maybe. Ideally I think we would not force "improvement" on other countries. But if we are, at least set them up for success. I'm not going to comment on whether USA has made good on this in the last 100 years, its worthy goal for any country I suppose. I think people are lazy and if they can do nothing and a country is taken advantage of for their benefit, well they will do nothin.
spaceman_2020 3y ago
Why would any country in a remotely adversarial relationship with America disclose their foreign reserves, especially in USD and EURO after what they did to Russia’s reserves? Just means that anything the country does against western interests will get their known reserves frozen.
- eunos 3y ago
  That aside China already built this hidden reserve since early 2000s when relationship was still excellent.
- woodruffw 3y ago
  > Why would any country in a remotely adversarial relationship with America disclose their foreign reserves, especially in USD and EURO after what they did to Russia’s reserves? For one: failing to disclose foreign reserves makes a relationship more adversarial, not less adversarial. For another: why are we assuming that China's foreign reserves are in banks that the US controls, or can otherwise curtail access to? The situation with Russia is instructive: CBR claimed to have around 50% of its reserves in US or EU institutions, but only a tiny fraction of that has actually been found[1]. It's much more likely that China, like Russia, is keeping the majority of its reserves in home (or friendly nation) banks. [1]: https://www.intellinews.com/the-eu-can-t-find-most-of-russia-s-300bn-of-frozen-reserves-271253 https://www.intellinews.com/the-eu-can-t-find-most-of-russia...
- nonethewiser 3y ago
  > Why would any country in a remotely adversarial relationship with America disclose their foreign reserves Yes - that's the point. It shows intentions against US interests.