That’s as the federal government must finance a $2 trillion budget deficit this fiscal year, meaning it’s already issuing a flood of Treasury debt. “Central banks are accustomed to holding foreign reserves in dollars because markets in U.S. Treasury securities are liquid. Central banks hold U.S. Treasuries because they can be freely bought and sold and used in interventions. “The bottom line is that Washington, fearing the consequences for U.S. financial markets, is reluctant to see foreign central banks use their dollar reserves,” Eichengreen concluded. The post By propping up the yen, the U.S. and Japan are actually admitting dollar dominance isn’t what it used to be, top economist warns appeared first on Fortune.