Why Currency Reserves Matter

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


This goes in the “obscure but sort of important” folder. Eduardo Porter reports that developing countries are building up excessively large currency reserves, partly as “insurance against financial disaster.” Rather tragically, these countries tend to lose money on all the dollars they’re buying up—and it’s not like they can really afford to lose money here—and what’s worse, the money they spend padding their reserves is money they’re not spending on important things, like health care or infrastructure or other domestic investments.

So why are they all doing it? Dean Baker and Karl Walentin have argued before that it’s because everyone thinks the international financial system is rather volatile and no one wants to go through the same meltdown that countries in East Asia suffered in the late ’90s. But the fact that these poorer countries all have to incur very large costs because of a rickety system set up largely to benefit the richer countries indicates, as Baker and Walentin wrote, “a serious failing of international financial institutions.”

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate