Global Economic Briefing: Global Liquidity

Global Economic Briefing: Global Liquidity December 21, 217 Dr. Edward Yardeni 516-972-7683 eyardeni@ Debbie Johnson 48-664-1333 djohnson@ Mali Quintana 48-664-1333 aquintana@ Please visit our sites at www. blog. thinking outside the box

Table Of Contents Table Of Contents Global Liquidity Supply 1 International Reserves & World Exports 2 Foreign Exchange Holdings 3 COFER 4 Allocated Official Foreign Exchange Reserves 5 Foreign Official Dollar Reserves (FRODOR) 6 US Treasuries & Agencies 7-8 Foreign Holders 9-1 Non-Gold Reserves: Emerging vs. Advanced 11 Non-Gold Reserves: Asia 12-13 Non-Gold Reserves: Latin America 14 Non-Gold Reserves: Middle East 15 Miscellaneous 16-17 December 21, 217 / Global Economic Briefing: Global Liquidity www.

Global Liquidity Supply 18.5 16.5 14.5 12.5 1.5 Figure 1. GLOBAL LIQUIDITY SUPPLY (trillion dollars, ratio scale) 18.5 16.5 14.5 12.5 1.5 8.5 Global Liquidity Supply* 8.5 6.5 Non-Gold International Reserves 6.5 4.5 4.5 2.5 2.5.5 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2.5 * Non-gold international reserves plus Fed s holdings of US Treasuries and Agencies. Source: International Monetary Fund (IMF) and Federal Reserve Board. 4 Figure 2. GLOBAL LIQUIDITY SUPPLY* (yearly percent change) 4 3 2 Global Liquidity Supply* (2.4) Non-Gold International Reserves (3.2) 3 2 1 1-1 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2-1 * Non-gold international reserves plus Fed s holdings of US Treasuries and Agencies. Source: International Monetary Fund (IMF) and Federal Reserve Board. Page 1 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

International Reserves & World Exports 24.1 18.1 12.1 Figure 3. WORLD EXPORTS vs (trillion dollars, ratio scale) Aug 24.1 18.1 12.1 6.1 6.1 World Exports (12-month sum) Non-Gold International Reserves.1 75 76 77 78 79 8 81 82 83 84 85 86 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 Source: International Monetary Fund (IMF)..1 6 Figure 4. WORLD EXPORTS & (yearly percent change) 6 4 4 2 2-2 Value of World Exports* (6.9) Non-Gold International Reserves (3.2) -2-4 75 76 77 78 79 8 81 82 83 84 85 86 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2-4 * Yearly percent change in 12-month average. Source: International Monetary Fund (IMF). Page 2 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

Foreign Exchange Holdings 14.1 13.1 12.1 11.1 1.1 9.1 8.1 7.1 6.1 5.1 Figure 5. vs FOREIGN EXCHANGE HOLDINGS (trillion dollars, ratio scale) All Central Banks Total Foreign Exchange Holdings (11.1) Non-Gold International Reserves (11.7) 14.1 13.1 12.1 11.1 1.1 9.1 8.1 7.1 6.1 5.1 4.1 4.1 3.1 3.1 2.1 2.1 1.1 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 Source: International Monetary Fund (IMF). 1.1 12.8 11.8 1.8 9.8 8.8 7.8 6.8 5.8 Figure 6. INTERNATIONAL RESERVES HELD BY ALL CENTRAL BANKS (trillion dollars, ratio scale) Q2 Q2 12.8 11.8 1.8 9.8 8.8 7.8 6.8 5.8 4.8 4.8 3.8 3.8 2.8 2.8 1.8 All Central Banks Non-Gold International Reserves (11.7) Total Foreign Exchange Holdings (11.1) Total Allocated Reserves (9.3) Allocated Reserves in US Dollars (5.9) 1.8.8 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 Source: International Monetary Fund (IMF)..8 Page 3 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

COFER 1 8 Figure 7. CURRENCY COMPOSITION OF OFFICIAL FOREIGN EXCHANGE RESERVES (COFER) (trillion dollars) All Countries Allocated Reserves Q2 1 8 6 Total US Dollars Other Currencies 6 4 4 Q2 2 2 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 Source: International Monetary Fund (IMF). 78 Figure 8. CURRENCY COMPOSITION OF OFFICIAL FOREIGN EXCHANGE RESERVES (COFER) (percent) 78 73 Dollars as a percent of allocated reserves 73 68 68 63 Q2 63 58 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 Source: International Monetary Fund (IMF). 58 Page 4 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

Allocated Official Foreign Exchange Reserves 1 8 Figure 9. CURRENCY COMPOSITION OF OFFICIAL FOREIGN EXCHANGE RESERVES (COFER) (trillion dollars) Q2 ALL CLAIMS IN US DOLLARS (as a percent of Allocated Reserves) 9 8 6 4 All Countries Allocated Reserves Claims in US Dollars Q2 All Countries Q2 7 6 2 5 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 4 4 3 2 1 Industrial Countries Allocated Reserves Claims in US Dollars 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 Q1 Q1 Industrial Countries Q1 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 74 73 72 71 7 69 68 67 66 65 64 63 62 61 6 4 78 3 Developing Countries Allocated Reserves Q1 76 74 72 2 Claims in US Dollars Q1 Developing Countries Q1 7 68 66 64 62 1 6 58 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 56 54 Source: International Monetary Fund (IMF). Page 5 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

Foreign Official Dollar Reserves (FRODOR) 13.6 12.6 11.6 1.6 9.6 Figure 1. & FRODOR (trillion dollars, ratio scale) 13.6 12.6 11.6 1.6 9.6 8.6 8.6 7.6 7.6 6.6 5.6 Non-Gold International Reserves 6.6 5.6 4.6 Foreign Official Dollar Reserves: US Treasuries & Agencies Held By Foreign Central Banks 4.6 3.6 12/2 3.6 2.6 2.6 1.6 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 Source: International Monetary Fund (IMF). 1.6 465 415 365 315 265 Figure 11. FOREIGN OFFICIAL DOLLAR RESERVES* (billion dollars, ratio scale) 12/2 465 415 365 315 265 215 215 165 165 115 115 65 65 US Treasuries & Agencies US Treasuries US Agencies 15 28 29 21 211 212 213 214 215 216 217 218 15 * Held by foreign official institutions at the Fed. Average of week ending Wednesday. Source: Federal Reserve Board, Table H.4.1. Page 6 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

US Treasuries & Agencies 26 24 Figure 12. US TREASURIES & AGENCIES HELD BY FED (billion dollars) 12/2 26 24 22 22 2 18 US Treasuries (2454.2) US Agencies (1779.8) 12/2 2 18 16 16 14 14 12 12 1 1 8 8 6 6 4 4 2 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 Source: Federal Reserve Board, Table H.4.1. 2 8 Figure 13. US TREASURIES & AGENCIES HELD BY FED & FOREIGN CENTRAL BANKS (billion dollars) 12/2 8 7 7 6 Total (7528.6) 6 5 5 4 4 3 3 2 28 29 21 211 212 213 214 215 216 217 218 Source: Federal Reserve Board. 2 Page 7 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

44 42 4 38 36 34 32 3 28 26 24 22 2 18 16 14 12 1 8 6 4 Figure 14. US TREASURIES & AGENCIES HELD BY: (billion dollars, nsa) Fed Foreign Central Banks US Commercial Banks 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 Source: Federal Reserve Board. US Treasuries & Agencies 12/2 12/6 44 42 4 38 36 34 32 3 28 26 24 22 2 18 16 14 12 1 8 6 4 15 1 95 9 85 8 75 7 65 6 55 5 45 4 35 3 25 2 15 Figure 15. US TREASURIES & AGENCIES HELD BY: (billion dollars, nsa) 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 Source: Federal Reserve Board. Fed + Foreign Central Banks + US Commercial Banks Fed + US Commercial Banks 12/6 12/6 15 1 95 9 85 8 75 7 65 6 55 5 45 4 35 3 25 2 15 Page 8 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

Foreign Holders 8 Figure 16. MAJOR FOREIGN HOLDERS OF US TREASURY SECURITIES (billion dollars) 8 6 Grand Total Foreign Official Instititutions Held by Foreign Central Banks 6 4 4 2 2 8 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 8 75 75 7 7 65 6 Foreign Official Institutions (as a percent of Grand Total) 65 6 55 55 5 45 4 35 3 25 2 15 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 Grand Total (as a percent of public debt) Foreign Official Institutions (as a percent of public debt) 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 Source: US Department of the Treasury, Office of International Affairs, US Treasury, and Federal Reserve Board. 55 55 5 45 4 35 3 25 2 15 Page 9 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

38 36 Figure 17. Foreign Holders FOREIGN OFFICIAL INSTITUTIONS HOLDINGS OF US TREASURY SECURITIES (as a percent on Non-Gold International Reserves) 38 36 34 34 32 32 3 3 28 28 26 26 24 24 22 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 Source: US Department of the Treasury, Office of International Affairs, and International Monetary Fund. 22 4 38 36 Figure 18. TRADE-WEIGHTED DOLLAR vs. FOREIGN OFFICIAL INSTITUTIONS HOLDINGS OF US TREASURY SECURITIES (as a percent of Non-Gold International Reserves) Foreign Institutions Holdings of US Treasury Securities 14 135 13 34 32 Broad Trade-Weighted Dollar 125 12 115 3 11 28 15 26 1 24 95 22 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218 Source: US Department of the Treasury, Office of International Affairs, and International Monetary Fund. 9 Page 1 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

12.5 1.5 8.5 Figure 19. Non-Gold Reserves: Emerging vs. Advanced : ADVANCED & EMERGING ECONOMIES (trillion dollars, ratio scale) 12.5 1.5 8.5 6.5 6.5 4.5 4.5 2.5 2.5 Emerging Economies (6.9) Advanced Economies* (4.7).5 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 217 218.5 * Includes United States, Canada, Australia, Japan, New Zealand, Austria, Belgium, Luxembourg, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and United Kingdom. Source: IMF International Financial Statistics. 8 Figure 2. : EMERGING vs ADVANCED COUNTRIES (yearly percent change in 12-month average) 8 6 6 4 Emerging Countries Advanced Countries* 4 2 2-2 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 15 17 19-2 * Includes United States, Canada, Australia, Japan, New Zealand, Austria, Belgium, Luxembourg, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and United Kingdom. Source: IMF International Financial Statistics. Page 11 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

Non-Gold Reserves: Asia 481 421 361 31 241 181 Figure 21. (billion dollars, ratio scale) 481 421 361 31 241 181 121 121 61 61 Asia Ex Japan & China China Japan 1 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 Source: IMF International Financial Statistics. 1 541 451 361 271 Figure 22. (billion dollars, ratio scale) 541 451 361 271 181 181 91 91 South Korea Taiwan India 1 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 Source: IMF International Financial Statistics. 1 Page 12 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

Non-Gold Reserves: Asia 317 272 227 182 Figure 23. (billion dollars, ratio scale) 317 272 227 182 137 92 137 92 47 47 Malaysia Indonesia Singapore 2 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 Source: IMF International Financial Statistics. 2 22.2 165.2 11.2 Figure 24. (billion dollars, ratio scale) 22.2 165.2 11.2 55.2 55.2 Thailand Philippines.2 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 Source: IMF International Financial Statistics..2 Page 13 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

Non-Gold Reserves: Latin America 73 65 57 49 41 33 Figure 25. (billion dollars, ratio scale) Sep 73 65 57 49 41 33 25 25 17 17 9 9 Latin America* 1 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 1 * Argentina, Brazil, Chile, and Mexico. Source: IMF International Financial Statistics. 48.5 4.5 32.5 24.5 16.5 Figure 26. (billion dollars, ratio scale) 48.5 4.5 32.5 24.5 16.5 8.5 8.5 Mexico Brazil Argentina Chile.5 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 Source: IMF International Financial Statistics..5 Page 14 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

134 124 114 14 94 84 74 64 54 Figure 27. Non-Gold Reserves: Middle East (billion dollars, ratio scale) May 134 124 114 14 94 84 74 64 54 44 44 34 34 24 24 14 Middle East 14 4 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 Source: IMF International Financial Statistics. 4 92 812 722 632 542 452 362 272 Figure 28. (billion dollars, ratio scale) Aug 92 812 722 632 542 452 362 272 182 182 92 92 Saudi Arabia 2 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 Source: IMF International Financial Statistics. 2 Page 15 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

14 Figure 29. (billion dollars, nsa) Miscellaneous 14 12 12 1 Turkey 1 8 8 6 6 4 4 2 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 Source: Central Bank of the Republic of Turkey. 2 5 45 Figure 3. (billion dollars, nsa) 5 45 4 4 35 35 3 South Africa 3 25 25 2 2 15 15 1 1 5 5 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 Source: South African Reserve Bank. Page 16 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

Miscellaneous 6 Figure 31. (billion dollars, nsa) 6 5 5 4 Russia 4 3 3 2 2 1 1 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 Source: Central Bank of the Russian Federation. Page 17 / December 21, 217 / Global Economic Briefing: Global Liquidity www.

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