China and Others Stop Buying Treasuries

The Wall Street Journal recently reported that China and other central banks have all but stopped their purchases of treasuries. While this is likely not a long- or medium- term change because China is so intertwined with the U.S. that it would suffer great economic pain if it tried to cut itself off from treasuries. It is a reminder that our current level of borrowing is unsustainable and if other countries really lost faith in our creditworthiness we would be in dire trouble.