But cash, as in the case of sovereign wealth funds, can be invested in more lucrative investments than t-bills. So cash is not always bad to hold, especially when it is the reserve currency - technically the "highest quality" money.
On 7/21/09 5:06 PM, "Jim Devine" <[email protected]> wrote: > I don't know the law, but it's clearly in the creditors' interest to > hold T-bills rather than cash, since T-bills pay interest. > > On Tue, Jul 21, 2009 at 2:03 PM, Jayson Funke<[email protected]> wrote: >> Hello Penners, >> >> As I understand it, the US requires foreign countries that hold US dollars >> as reserve currency to do so by purchasing and holding US T-bills (thus >> contributing to the US's ability to maintain its current account deficit). I >> recall reading somewhere that as early as the 1950s Congress wrote this into >> law, that US foreign reserve dollars must be held in the the form of >> T-bills. >> >> If this is correct, is the US unique in this regard, or do other currencies >> have similar requirements as to how their currencies are held by foreign >> states? >> >> Any light you could shine my way is appreciated. >> >> Jayson >> >> Jayson J Funke (ABD) >> Graduate School of Geography >> Clark University >> 950 Main Street >> Worcester, MA 01603 >> >> >> _______________________________________________ >> pen-l mailing list >> [email protected] >> https://lists.csuchico.edu/mailman/listinfo/pen-l >> > > _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
