The People's Bank of China now holds the most dollars on the asset side of its balance sheet, more than even the US Federal Reserve Bank.
Now THAT's a global imbalance.
The full essay from Brad Setser is available at this link which is a bit slow in responding at times. It is a discussion of how a monetary authority can influence policy by acquiring certain types of debt rather than others.
Its a bit of a moot point, since China holds US debt in aggregate, excepting any Fannie and Fred agencies of course. Since the Treasury and Fed are busily monetizing nearly everything, China may only have a single lever to pull: to buy or not to buy.
But it does strike us as a nice example of the imbalances in the world's financial structure, and yet another reason why a true monetary deflation in the US dollar is most likely a fantasy.
"The Capitalists will sell us the rope with which we will hang them." V.I. Lenin
Follow The Money
Quaint
Brad Setser
...The PBoC now has a larger dollar balance sheet (on the asset size) than the Fed. It holds around a trillion dollars of Treasuries and Agencies (over $950b can be identified using the TIC data, and the TIC data understates China’s holdings … ). The Fed has around $900 billion in assets — $940 billion, to be precise....