Family Guy partner, official, running, account, balance

BC_MBA_student

So let's say I am Peter Griffin and I just found out that I am the ruler of Petoria. My federal reserve bank holds a few foreign bonds and since we are running a huge trade deficit with our largest trading partner I decide to sell them to fill the 'gap'

Now I ask my son Stewie to calculate the 3 components of the balance of payment formula. How should he account for the sale of foreign bonds? Are they part of my capital account or official reserve?

I told him official reserve but I think I need some 'expert' advice...



Edited 1 time(s). Last edit at Tuesday, June 7, 2011 at 10:07AM by ZeroBonus.

ap0258

We are talking about Federal Reserve selling foreign bonds from its repository. We are not referring to selling foreign bonds by ordinary citizen or an US Bank.

Federal Reserve selling foreign bonds held in its repository is counted in Official Reserves. This action brings in Dollars and out goes the foreign asset.
This will be a counter balance for the current account deficit.

Best of luck to you all in your forthcoming exams.

FinancialAnaly

psriniva Wrote:
-------------------------------------------------------
> We are talking about Federal Reserve selling
> foreign bonds from its repository. We are not
> referring to selling foreign bonds by ordinary
> citizen or an US Bank.
>
> Federal Reserve selling foreign bonds held in its
> repository is counted in Official Reserves. This
> action brings in Dollars and out goes the foreign
> asset.
> This will be a counter balance for the current
> account deficit.


The balance of the official reserve was tiny in comparison
to massive dificit in current account. Investment account balance OTOH was close to dificit amount.

spreads

Selling bonds is current account action

kkn006

But yes, official reserves indeed. +1

ningning1984

Thanks tips

flyinggirl

Early on in this century, official reserves assets were primarily gold. Now primarily financial assets denominated in a foreign currency that is widely accepted in international transactions: Pounds assets, U.S. dollar assets (key currency worldwide), Reserve positions in IMF and SDRs (created by IMF).

ayodayo

JamboRambo Wrote:
-------------------------------------------------------
> "Stewie should account for the sale of foreign
> bonds as part of the Official Reserves." is what
> Paddy said...


oh whoops

damn that stewie's dad, paddy and rambo all got +1

Analyze_This

deleted



Edited 2 time(s). Last edit at Tuesday, June 7, 2011 at 03:41PM by gangsta.

iteracom

"Stewie should account for the sale of foreign bonds as part of the Official Reserves." is what Paddy said...