Asian central banks and the yield curve

Brad Setser's Web Log: Unraveling the mysteries of the Treasury yield curve

Top comment on the central bank buying of US debt - lots of data sources and information on fx market from the BIS.

It seems intuitively obvious that, without the intervention from Asian central bank FX internvetion (parked in US treasuries), interest rates would be higher in the US. Brad Setser does the groundwork with the figures for bond purchases etc. The solution to increasing net external debt of the US is to reduce the curent account deficit through higher prices and lower relative growth. The Asian central banks are preventing these things from taking place.

More information here from Brad on international capital flows and US deficit financing