[lbo-talk] Are the Chinese dollar holdings hedged? (no)

Daniel Davies d_squared_2002 at yahoo.co.uk
Fri Jan 9 00:24:56 PST 2004


John Mage wrote:


>>Are the enormous and growing Chinese/Japanese US dollar reserves hedged?

Almost certainly not; they're just too big. For every short there has to be a long, so if the Chinese and Japanese were to hedge their exposure by selling dollar futures, then someone else would have to wear the long-dollar postion. I don't think anyone is big enough to hold that sort of risk in that sort of size.

dd

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