What? Me worry?

It may be nothing to worry about. But, then again, it may be the early days of a move by foreign central banks to lower their investment in US debt. In February foreign central banks bought $11.3 billion of our debt. In March they sold $15 billion of our debt; this was the first time they were net sellers since August 2003.

Although the banks turned into sellers in March, other foreign buyers (such as hedge funds) more than filled in the gap so that, on balance, foreigners continued to invest in our debt. However, the amount bought was significantly less than in the previous two months. Plus, the nature of the private buyer is much more volatile than that of the central bank.

Another worrisome factor is the purchase of US stocks by foreigners. In February it was $7.5 billion, in March $1.7 billion.

Our government’s debt – and, in a roundabout way, our economy – has been propped up by foreign investments. What happens if that goes away?