Brad Sester on the same topic of the US Federal paper (here) gives pretty much the same analysis of the Treasury's supply and demand imbalance emerging at this time, with pretty much the same implications:
"My guess is that central bank demand for US Treasuries will fall both absolutely and as a share of the US borrowing need. That is no bad thing. It is a byproduct of a smaller US current account deficit and a smaller current account surplus in much of the emerging world."
And a bit more beef on the direction of US foreign holdings sales and foreign withdrawals from the US equities:
"To be clear, official demand for Treasuries surged in the fourth quarter even as reserve growth slowed – as central banks shunned Agencies and likely pulled big sums out of the hands of private fund managers and parked those funds at the Fed. But once that reallocation is finished, growth will be driven by the underlying growth in countries reserves. And that is slowing …"
At current valuations in the sovereign debt markets, you have to be mad to follow the crowd into buying low yield paper when the governments issuing it have extended near sovereign guarantees to higher yielding corporate debt and are about to do so for quasi-government / local government debt as well.