Monday, February 23, 2009

One Way to Counteract the Flight to Safety

To caricature: if the world loves American Treasury bills but the funds would be more useful elsewhere, then the government should issue the bills, and use the proceeds to channel the funds where they are needed. It should buy some of the riskier assets, and return some of these funds back to emerging-market countries to offset capital outflows.
Sounds good to me.

via The Economist

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