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by jcoffland 3769 days ago
You read it wrong. It's cash in hand not public debt they have more of.
1 comments

No, I read it right. It's American public debt they hold. They don't have 1 trillion dollars in cash sitting in a vault. They are holding U.S. Treasury bonds.

And again, I don't understand why having 1 trillion dollars in a reserve bank is a useful measure of economic power. The Chinese economy has a GDP of $10tn compared with the U.S. economy of $17tn. That is an example of a meaningful metric of power.

^^^ the parent commenter edited his entry after I submitted my original comment, which changes the relevance of my comment.

I think it is more like economic long term insurance than power.
They have $3.9T worth of cash reserves sitting in a vault in addition to holding over $1T in US debt.
No, they don't. There's only 1.4 trillion dollars in circulation.

http://www.federalreserve.gov/faqs/currency_12773.htm

Not all of their cash reserves are denominated in US dollars.
There's around 5 trillion US dollars worth of hard currency in the world. http://gizmodo.com/5995301/how-much-money-is-there-on-earth 80% of it is not sitting in a vault in China.