Who is financing the US - Brad Setzer

"What do China, Russia, Malaysia, Saudi Arabia and the other Persian gulf oil sheikdoms have in common?

Quite a lot, actually:

All have significant current account surpluses. China's surplus is all the more impressive because imports, rather than exports, oil.
All either peg to the dollar, maintain basket pegs that seem an awful lot like dollar pegs, or intervene heavily in the foreign exchange market.
And since the countries with the biggest current account surpluses more or less have to finance the US for the global balance of payments to work out - though finding the precise channels is a bit of a mystery.
And given the size of China's reserve increase, Russia's current account surplus (Russia's trade surplus topped $34 billion in the third quarter), and Saudi Arabia's current account surplus, these three countries are almost certainly constitute three of the four biggest financiers of the US. Japan is the other. But right now Japan's government isn't intervening in the foreign exchange market - while China, Russia and Saudi Arabia certainly are.

Kind of ironic when you think about ... the United States biggest creditors do not exactly share the United States' political system - or necessarily share its foreign policy objectives."