China was once our biggest buyer, but now it's dumping US government bonds at an alarming rate. So are Russia, Brazil and Taiwan, signaling an emerging markets slowdown that could affect the US economy.
Foreign net sales of US treasury debt maturing in at least a year hit $123B in the 12 months ending in July, its biggest decline since data started in 1978. Foreign official purchases in the year ending in January 2013 were as high as $230B.
This reversal has some analysts expecting much higher yields in the $12.8T Treasury market. But other investors say as long as there's demand for US bonds from foreign and US companies, rates will likely remain low. [WSJ]
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