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Foreigners race into U.S. debt

June 15, 2012: 12:06 PM ET

The world is hungry for U.S. debt.

Foreigners increased their holdings of long-term U.S. debt by $25.6 billion in April, up from a $21.9 billion increase in March, according to the Treasury Department's latest report on foreign holdings of U.S. debt released Friday morning.

The United Kingdom, France and the Caribbean had the biggest appetites for U.S. government-backed debt, according to the Treasury International Capital data (TIC) for April.

China, the U.S. government's top creditor, is also buying again. After decreasing its holdings of U.S. Treasuries in February and March, China added $1.5 billion in April, and holds $1.1455 trillion.  China's holdings are still far below the record high of $1.31 trillion it held in July 2011.

Japan, America's second-largest creditor, was among the heaviest sellers of U.S. debt in April, decreasing its position by $10.2 billion.

The overall global buying spree is yet another sign that investors are racing into safe havens and that the U.S. government's backing is still considered the ultimate safety seal.

Yields on U.S. 10-year Treasuries have hit all-time lows in recent weeks, falling below 1.5%.  And at 1.5%, yields on U.S. Treasuries are below inflation, meaning that investors are willing to effectively lose money to hold securities considered safe.

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Maureen Farrell
Maureen Farrell
Staff writer, CNNMoney

Maureen Farrell is a staff writer at CNNMoney and covers Wall Street, banking, mergers and the stock and bond markets. Prior to joining CNNMoney, she covered venture capital and entrepreneurs for Forbes, and mergers and bankruptcy for Mergermarket and Debtwire, both divisions of the Financial Times.

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