Looking at the Fed’s latest numbers, I see its “custodial” holdings of bonds actually owned by foreign central banks have now passed the $1 trillion mark — an increase of almost 25% since this time last year:
The Fed’s own bond portfolio, by contrast, is worth less than $660 billion — and the entire left-hand side of the balance sheet (net reserve credit) totals just $722 billion. If this keeps up, Uncle Sam is going to have to put a new motto on the dollar bill: “In Asia We Trust.”
Reading the full article is recommended. Some of it went over my head, but the bits that did make sense were striking.