Examples of investor demand for safe, liquid assets are not hard to identify. One source has been foreign official investors, mostly emerging market countries, which invested about $ trillion in the United States in the four years preceding the crisis, largely in U.S. Treasury and agency securities.
Much of this activity arose from the investment of foreign exchange reserves by countries running large current account surpluses. Some of these reserves were undoubtedly built up as a precautionary measure in light of the financial problems in emerging markets during the late 1990s, while others are attendant to policies of managed exchange rates.