US debt demand at record, China is largest holder

Foreign demand for US Treasuries rose to a record level in August, further evidence that a majority of countries still see US debt as a safe haven.

The U.S. Treasury Department says total foreign holdings rose to a record 5.43 trillion dollars in August, up 1.5 percent from July.

China increased its holdings by 0.5 percent to 1.15 billion dollars , remaining the largest foreign holder of US debt. And Japan also upped its holdings by 0.5 percent to 1.12 trillion dollars.

Demand for US debt has remained high even though the country has run budget deficits in excess of one trillion dollars for the past four years and as the U.S. Fed continues to pump cheap money into the financial system via quantitative easing.

Continual weakness in Europe, where no sign of the debt crisis is abating is one major reason why US treasuries are still considered a safe investment.