Capitalists Eager For Billions Of Tiny Portraits Of Chairman Mao

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The world's biggest central banks may take some small steps to make their piles of cash a bit better reflective of global economic reality.

In “Survey of Reserve Managers: Lessons from the Crisis,” economists Aideen Morahan and Christian Mulder found that central banks with more than $2 trillion in reserves want to adjust the composition of currencies in their portfolio. The survey was circulated last year and the results were released last week.

Almost all currency reserves are held in U.S. dollars, euros, yen, British pounds and Swiss francs. At the end of 2012 other currencies represented around 3.4% of the total central bank foreign exchange holdings, up from just under 1% in 2002. That’s despite the fact that emerging markets now account for roughly half of the world’s growth.

Now, the taste for yuan is understandable. But this is an indignity that the greenback can hardly be expected to suffer:

There’s a particular interest in focusing on dollars from two major commodity exporters, Canada and Australia. “The commodity currencies can be seen as a proxy for emerging market currencies that are often not considered investable yet,” the authors said.

And, for those central banks concerned about the security of their hordes of bitcoins, there's a new currency out there that requires no storage space.

Amazon today launched its virtual currency program, dubbed Amazon Coins.

To kick things off, Amazon is providing all Kindle Fire owners with 500 free Amazon Coins, which are worth $5. "You can use the coins to buy apps and games, as well as items inside apps and games," Amazon said in a note on its homepage.

Amazon also said Amazon Coins are available to purchase at a discount, for savings of up to 10 percent depending on how many coins you purchase.

Central Banks Want to Hold Emerging-Market Currencies [WSJ Real Time Economics blog]
Amazon Launches 'Coins' Virtual Currency [PC Magazine]

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