China’s foreign reserves are certainly huge [...] about 5-6 % of global gross domestic product. But they are not unprecedented. Twice before in history a country has [...] run up foreign reserves of the same magnitude. The first time occurred in the late 1920s when, after a decade of record-beating trade and capital account surpluses, the United States had accumulated what John Maynard Keynes worriedly described as “all the bullion in the world”. At the time, total reserves accumulated by the US were more than 5-6% of global GDP. The second time occurred in the late 1980s, when it was Japan’s turn to [...] accumulate [...]s only a little less than the equivalent of 5-6% of global GDP. - Daniel Dulitz