Kevin Drum  Global Capital Flows  | Fri Mar. 27, 2009 9:21 AM
GMT That's an exciting headline, isn't it?  But it's important. 
One of the key bits of financial deregulation over the past
three decades has been the dismantling of capital controls,
allowing vast tidal waves of money to flow between borders
without hindrance.  In general, this has been a plus: nobody in
Britain wants to go back to the days of sleeping on continental
friends' couches because they weren't allowed to take more than
50 pounds out of the country. On the other hand, the Asian
currency crises of the late 90s were largely due to
unsustainable amounts of unregulated foreign capital suddenly
flowing into the region (and then just as suddenly stopping),
and the current banking crisis in the U.S. is at least partly
due to an overreaction to the Asian crisis.  For the past decade
all that Asian money has been flowing into the U.S. instead, and
a tsunami of cheap money was one of the factors that caused the
credit and housing bubble of the pa