Of course, no fiscal rule can account for all contingencies.

For Global Growth and Stability, Mobilize the Reserves

The underlying idea is simple every year, countries around the world set aside reserves as insurance against contingencies such as an abrupt downturn in foreign lenders' sentiment or a collapse of export prices.

The underlying idea is simple every year, countries around the world set aside reserves as insurance against contingencies such as an abrupt downturn in foreign lenders' sentiment or a collapse of export prices.

Consequently, these reserves provided the fuel for economic populism.

Africa s natural gas reserves amount to about 8 of global reserves.

But finding a formula to talk about such contingencies may be the next step for China as it seeks to overcome its quandary.

Call In the Reserves

Could something similar be in store for today s holders of large reserves?

Reserves are like savings accounts.

First, unlike in some other countries, Chinese commercial banks are paid reasonable interest rates on required reserves, except for the extra reserves that they hold.

The less liquid a bank s assets, the greater the need for such reserves.

In normal times, there are valid reasons for paying interest on excess reserves.

This means that the SDR is not an attractive unit for official reserves.

Now there will be no more freebies for citizens of the country with the world's fourth biggest gas reserves, behind only Qatar in reserves per capita.

Certainly, oil reserves are not infinite.

One is the need for banks and other financial institutions to hold liquid reserves.

For surplus countries that want to accumulate reserves, it would reduce exchange rate risk.

But the market for overnight reserves now appears to be divided into three segments.

These are large numbers even for Russia, with its currency reserves of 480 billion.

Second, countries with large accumulations of dollar reserves will be shifting substantial fractions of those reserves into euros.

Most important, it should announce a strategy for eliminating the massive volume of such reserves.

Central Asia s hydrocarbon reserves, and its pivotal location, make it strategically important for many countries.

What matters is selling the reserves and being rich now, not finding more for later.

Instead, China s reserves mostly underwrite America s debt.

It has 10 of global oil reserves.

Most people just pay off their mortgage, make the mandatory contributions to their state or private pension (if they have one), and keep some money for short run contingencies.

For countries that receive less than the amount that they need to put into reserves, the new global money'' would go into the reserves, freeing dollars that these countries would otherwise set aside. Countries that receive more than they must put into reserves could exchange the new money for conventional currencies.

Covering this drop in reserves more than half of gas reserves and a fifth of oil reserves have been consumed with imports implies an annual cost of more than 300 billion.

Fortunately for its democratic prospects, Egypt has only very modest reserves of natural gas and oil.

But it has yet to build a strong defense system that can respond effectively either to regional contingencies or to global needs.

We must take full account of predicates, conditionals, and contingencies in order to specify more completely which countries should adopt what policies.

Moreover, reducing the need for countries to set aside funds for reserves would also facilitate some reduction of global imbalances.

We have rich reserves of gas and coal.

Selling 2 trillion of reserves will take years.

Foreign exchange reserves are an immense 1.9 trillion.

Yes, China does pile up reserves in dollars.

Money put into reserves is income not spent.

The country has significant reserves of natural gas.

We'll have to fall back on our reserves.

For the 12 months ending in July, the St. Louis Fed reports that bank reserves rose 31 .

Reserves are costly, for the money could have been spent on development projects that would enhance growth.

For countries that receive less than the amount that they need to put into reserves, the new global money'' would go into the reserves, freeing dollars that these countries would otherwise set aside.

In the first four months of this year, China added 44.3 billion of US Treasury securities to its reserves, meaning that such debt now accounts for 38 of China s total foreign exchange reserves.

Today s big surplus countries do not need large reserves.