>Because the yeild on our bonds is low, and the dollar is being devalued. For instance, if someone from europe bought a bond a year ago for $1000, got a 4.5% return ($45) but the dollar devalued and is only worth 92% of what is was worth a year ago (in euro's) They now have $1045*.92 = $960, they have lost money. How long do you think they are going to be willing to do that?

I think they're going to be willing to do that until they decide there are better opportunities elsewhere. As it is, despite your apparent conclusion that our treasury bonds are a bad investment, other investors are still concluding otherwise.

Also, it's not as if these investors are making a group decision. Some of them are deciding to buy. Some are deciding to invest elsewhere. There is little reason to believe that "they" are suddenly going to stop buying. If there is such a trend, we will adapt.

>In addition, countries from around the world have indicated they want to diversify there currency reserve, which means buying less dollars, and buying more currency from Asia, Europe, Etc. It's called not having all your eggs in one basket, good for them, bad for us.

They have always been free to do that, so far as I know. If "they" make that decision, we'll adapt. Either way, I can find no economists predicting imminent doom for the U.S. economy.