A number of commentators on the last post seemed surprised by my claim that U.S. monetary policy exacerbated the shortage of safe asset problem during the early-to-mid 2000s. The argument that the Fed can influence the global demand for safe assets should not be controversial. The Fed, after all, has an inordinate impact on global monetary conditions and can influence long-term yields by managing expectations. Obviously, the Fed is not the only determinant of global safe asset demand as I have acknowledged many times by noting there was a structural component as well. And yes, financial innovations, poor governance, misaligned creditor incentives, and other private sector failings played a role too. But to claim the Fed had no influence on the demand for safe assets during the housing boom requires ignoring what seems to me to be the obvious. It also requires ignoring what folks on Wall Street have to say. It also ignores rigorous empirical studies by folks at the Bank of England, the ECB, and the OECD. It is a shame that these studies are ignored by Bernanke and other apologists of Fed policy during the housing boom.