From the Aug. 19 "Inflation News Aids Bonds and the Fed" in Barrons, by Randall W. Forsyth, comes this set of revelations (emphasis mine):

Numbers for June, the most recent month for which data are available, show that overseas investors sharply increased their purchases of US Treasuries, to $27 billion, from $8.19 billion in May. But excluding Great Britain and Caribbean tax havens, overseas investors actually sold $1.3 billion in Treasuries. Moreover, foreign central banks dumped $18.1 billion worth of U.S. obligations. "This is a reflection of a growing trend toward diversification of foreign-exchange reserves, as the euro is becoming an increasingly attractive option for foreign official institutions," write PNC Bank economists.

Stepping into the breach, investors in the U.K., the Cayman Islands, and the like took $28.3 billion of Uncle Sam's paper, while the rest of the world was selling it. The buying may have come through the City of London and Grand Cayman, where many hedge funds are domiciled and where the numbers are compiled, but the money came from elsewhere.

Good thing that the hedge funds stepped forward to plug the gap by buying Treasuries. Foreign investors also continue to be consistent, active buyers of other U.S. securities, notably U.S. agency issues (think Fannie Mae and Freddie Mac) and, especially, corporate bonds.

Towards the end of the piece, Forsyth points out:

For a variety of reasons, U.S. investments have been sufficiently alluring to draw enough capital recently from around the globe to keep the dollar from crashing under the weight of America's massive deficit. The rest of the world uses dollars as the primary medium of exchange and store of wealth. America can print dollars at will. You can't beat that arrangement, at least from the U.S. standpoint. But investors abroad may get their fill of greenbacks.

Which, of course, may be what we're already observing here.