Two years ago, when the crisis hit, the Canadian Government had the good sense to own almost no U.S. Government securities.

They have since invested in 120 billion in U.S. treasuries.

Why?

Does anyone know why?

My guesses:

1) Some kind of deal with the devil -in exchange for not having tariffs and an abrogation of NAFTA, the Canadian Government offered to take up the slack when the Chinese (and others)started selling.

2) Debt swaps - Canadian Government pretending to borrow money from the U.S., while the U.S. pretends to borrow from us. If this is the case, why did the amount of purchased securities last year (80 billion dollars) exceed our 2010 deficit (54 billion dollars)?

3) Effort to suppress the value of the Canadian dollar (by selling it and buying U.S.) and soften the landing?

Why don't I hear Canadian economists and commentators talking about us potentially pissing away more money than the national deficit?

Not out to offend U.S. listeners here, but I'm at a loss to figure out why we should get caught up in a mess we managed to avoid.