The total foreign exchange holdings have grown 2% quarter over quarter to 10.8 trillion. Annualized it amounts to 8% per year (which matches the MZM increase of money supply as pointed out by Michael Pento). That also means that gold should go up 8% per year at least to match foreign exchange holdings.
What's interesting to note is that people have dumped the euro ($1459 billion to $1451 billion) and bought the USD ($3613 billion to $3716 billion). The USD is still managing to preserve its reserve currency status after all. The euro did show a lot of weakness in Q3 of 2012.
I wonder what Q4 will bring as the euro went up in terms of gold while eurobonds were increasing in value against US bonds. I also wonder what will happen next year when QE3 is going to be implemented. Will they flee the USD and the Japanese yen?
 |
| Table 1: COFER Q3 2012 |
 |
| Chart 1: EUR/USD |
 |
| Chart 2: Foreign Exchange Reserves |
