assets has played in accounting for the cumulated change in the asset side of the central banks’ balance sheet from 2002 to 2010. All the other types of assets played a relatively small role in the expansion of emerging Asia’s central bank balance sheets. Some view this behaviour as one-sided and aimed to keep exchange rates undervalued. In reality, the defining, unique, property of a central bank’s balance sheet is the power to create base money. If there is too much base money and the central bank has insufficient assets to sell, it must resort to policies 3 or 4; alternately, it must be given the assets to sell by the government or the power to issue bonds.