And China already accumulated over $ 1,500 billion of reserves and rising……..

Japan was until 2006 the country with more foreign reserves.

Those who follow my blog, you know what I’ve written several times on the global foreign exchange reserves (see post from November 2006, “Where are the global foreign exchange reserves“). It is one of the clearest indicators that tell us the health of a country. When the massive Asian crisis of 1998, most Asian countries had high current account deficits and low foreign exchange reserves because they need foreign investment. Once triggered the crisis, its foreign exchange reserves were evaporating what that led to a tremendous crisis, devaluations, very high interest rates and therefore strong recessions.

¿Is it normal that aren’t major world economies which have more foreign exchange reserves?, I think it is the only time in economic history that poor countries have reserves and rich countries have debts and deficits (see my post “poor countries are rich and the rich poors” of July 14, 2007 or post “global imbalances” in November 2007).

As Jim Rogers explains, “The Chinese save and invest 35% of their income. The Americans only 2% ”

But another important question is, ¿in wich currencies they keep their reserves?, Is no easy answer, according to Mansoor Mohi-Uddin strategist on the currency market bank UBS, central banks still retain two-thirds of its foreign exchange in dollars , Although their positions in Euros and British pounds are at historic highs. According to the latest IMF report on all central banks with the exception of China, a 63.93% of them maintain their dollar reserves to December 2007, almost equal to 63.77% in the third quarter.

I said a year ago that the world is changing very rapidly, perhaps I should say, the world has already changed. Just read the list of countries with World major foreign exchange reserves.