Japan is sitting on more than $950 billion in foreign exchange reserves, second only to China's $1.9 trillion. Together, they control a major pool of funds that could come to the rescue of the West's severely strained financial industry. Options range from helping to provide credit to strapped financial institutions to cash infusions in return for ownership stakes in them.

 

could someone please shed light onto the foreign exchange stuff...!!! why these countries are stockpiling such huge amount of forex and what good does it do and more importantly what harms can it cause to the states.

China has 3 trillion dollars in reserves .

well...what then...?????...someone please!!!!

"Reader digests"

A gentleman trying to install New Electronic Equipment and calls the Support tech. In the middle of the conversation the caller tells the tech support " I am going to hang on now and going to join the college and call you back as I am finished'

Same Way,

May be we need to go back to college and take finance classes to understand these current issues.

 

 

also USA has taken loan of $700 billion from china, right? 

Hey Guys,

here is an article that will answer most of your questions

http://www.cato.org/pub_display.php?pub_id=3706

 

Oblivious,

try wikipedia, u will get most of the answers in simple terms,

thats what i like about internet !!!!!!!

So, whats the real foreign reserve of these countries? Where did you get your data from?

Its all about the CASH and CREDIT. Virtually for decades starting 1990s USA is run on the credit. Credit is the money we borrow from others with incentive of certain interest and payback. At this moment, China , Japan and some middle eastern countries are lending money to USA and Europe. Because of housing crisis , USA now is almost in a state of huge debt. It doesnot have Capital to pay back those trillions of dollars back. But to keep economy running it still needs money. Coincidently, world still believe in the capacity of $. We still feel more freedom to invest in USA then other countries.

Its all about the CASH and CREDIT. Virtually for decades starting 1990s USA is run on the credit. Credit is the money we borrow from others with incentive of certain interest and payback. At this moment, China , Japan and some middle eastern countries are lending money to USA and Europe. Because of housing crisis , USA now is almost in a state of huge debt. It doesnot have Capital to pay back those trillions of dollars back. But to keep economy running it still needs money. Coincidently, world still believe in the capacity of $. We still feel more freedom to invest in USA then other countries.