My India My New Hope!

The fate of the PIIGS (European nations now infamous for their huge debt burdens) may have come as a rude shock to investors in Europe. But the economy which is the biggest investor in US Treasuries does not think so. In fact China is now supposedly more bullish on the Euro zone than on the US.
The Chinese central bank has been buying more of Euro bonds rather than selling the same. As against this its sale of US Treasuries over the past few months has been well documented. Japanese bonds too have found takers in China. This may seem to be just a case of diversification of investments. However, the underlying fact may be of huge concern to the US Fed. Asian central banks, holding around 60% of the world's foreign exchange reserves, are turning away from the dollar. The world's reserve currency is in dire need of support.