[jwhite]

Actually I think it might be both. As I understand it, the US tends to pay for imports in USD, which it can do since it is the world's reserve currency. Trading partners then invest their USD trade surpluses back in US securities, I would assume at least partly to avoid affecting the values of their own currencies.

Wikipedia's article on the rise and fall of the Bretton Woods system is fascinating reading for those interested in the origins of the current situation (although it's also long and dry).

http://en.wikipedia.org/wiki/Bretton_Woods_system