We Don't Dictate the Terms

http://www.bloomberg.com/apps/news?pid=20602007&sid=a6zQi5wESdK0&refer=rates

``The support that Asia has shown in buying U.S. Treasuries has been a major supporter of keeping long-term interest rates lower than where they probably would be,'' said Gary Pollack, who oversees $12 billion as head of fixed-income trading in New York at the private wealth management unit of Deutsche Bank AG, Germany's biggest bank. ``This could put some upward pressure on yields in the United States.''

U.S. long-term interest rates would be about 90 basis points, or 0.90 percentage point, higher without foreign government and central bank buyers, according to a 2006 study for the Fed by Professors Francis and Veronica Warnock at the University of Virginia in Charlottesville.

Merrill Lynch's main index of U.S. government securities returned 3.3 percent for July and August. For investors in Japan, the biggest holders outside the U.S., the index lost 3.1 percent after accounting for changes in the currency.