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Paul J. Davies

It’s the $65 Trillion in Debt You Can’t Find That’ll Get You

Accounting conventions have hidden immense amounts of foreign-exchange liabilities. We might not know where they are until the next crisis.

Where are the US dollars?

Where are the US dollars?

Photographer: Lam Yik/Bloomberg

Sixty-five trillion dollars is a not big number: It’s a huge, barely comprehensible number. It’s more than 2 1/2 times the size of the entire US Treasury market, the world’s biggest. It’s 14% of the value of all financial assets globally, according to a tally from the Bank for International Settlements.

It’s also the value of hidden dollar debt unrecorded on the balance sheets of non-US banks and shadow banks as of June this year, also according to the BIS, the central bankers’ central bank. It has been growing rapidly, having nearly doubled since 2008.