To our readers, here is some interesting development from china, which holds $1.154 trillion of US government debt(Biggest foreign buyer of US treasury). Read our previous story here.

Questions have started raising about higher returns from US treasury according to a researcher from China. Zhang Jianhua, a head of research at the People's Bank of China, said worries that the heavily indebted U.S. government may not repay its debt could drive Treasury yields higher and cause U.S. debt prices to fluctuate. and China wants that its investments will be protected from this. But price volatility aside, Zhang was otherwise confident that demand for U.S. Treasurys would stay healthy due to lack of investment alternatives, if nothing else.
Treasury prices spiked last week, when a report from S&P showed that it will cut AAA rating if US will continue budget deficit. this statement had a little impact on Treasury purchases by foreign central banks and continued to grow.

Due in part to its size, the U.S. Treasury market is deemed to be among the safest in the world as it allows investors to buy and sell without prices swinging too much.

But the gigantic-and-growing market is also a sign of poor U.S. fiscal health. U.S. government debt is expected to hit its $14.3 trillion ceiling as early as May.
( Source: Reuters, CNBC )