The presidential candidateâ??s I-wonâ??t-be-borrowing-money- from-China pledge may soon be moot. Japan now holds $1.12 trillion of U.S. Treasuries to Chinaâ??s $1.15 trillion. Japanese purchases are steadily rising, while Chinaâ??s holdings have declined more than 10 percent since mid-2011.
Yet all this obsessing about who holds Americaâ??s debt is a distraction. The real issue is whether it makes sense for any major economy such as the U.S. to export more than 50 percent of its IOUs. Shouldnâ??t countries redouble efforts to build bigger domestic customer bases for their debt? Shouldnâ??t they be more, well, Japanese?
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