THE DANGER IS THAT WE'LL HAVE TOO LITTLE DEBT, NOT TOO MUCH:

Overseas buyers, led by China, are buying U.S. debt to gather dollars and help weaken their currencies as a way to boost exports. Financial institutions are stocking up in response to regulations that require them to hold extra capital. Many investors are purchasing the bonds because they yield more than comparable securities.

The purchases are taking place while the supply of U.S. government debt is shrinking, due to an improving economy and narrower budget deficit. Strong global demand, shrinking supply and uneven economic growth have helped to limit the impact of reduced Treasury purchases by the Federal Reserve, fueling a price rally that few analysts predicted.

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