The U.S. is experiencing a drastic drop in debt due to a drastic sell-off by a host of foreign central banks. In the first six months of this year alone, global central banks have dumped a net $192 billion of U.S. Treasury bonds, doubling the pace in the same period last year, when $83 billion was sold.

According to the Treasury Department, the net selling of U.S. notes and bonds year to date thru June has reached historic numbers and is the largest selloff since 1978. Leading the list of countries discarding U.S. debt at historic rates are China, Japan, France, Brazil and Colombia.

U.S. Treasuries are government issued instruments that are considered one of the safest assets in the world and are often traded as the last line of defense against any possible loss of principal. The most popular debt instrument is the bond.

Commonly referred to in the investment community as the T-Bond, this long-term bond matures in between 10 to 30 years, are issued at $1,000 par value and pay interest semiannually.

In times of economic turmoil, these instruments are the least risky of all investments and are regarded as one of the key cornerstones of both the domestic and international economy. Because of this, many countries keep their cash holdings in U.S. government bonds.

The huge sale of treasury bonds is done primarily by countries so they can accumulate cash to help prop up their currencies if they're losing value and is usually a sign of weakness in the global economy. It is often the most unstable countries that trade in their bonds where low oil prices and other economic factors contribute to the trend.

Private demand for the bonds, however, has sky-rocketed. Demand is so high that the U.S. can afford to pay historically low interest rates. The 10-year U.S. Treasury hit a record low of 1.34% earlier this year, before bouncing back to about 1.58%, currently.