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Treasuries, on the other hand,are where the big money goes (not just because of FDIC limits). Hedge funds and other big time day traders play the Treasury market, driving down yields when they want to buy. This is where the international money goes and the pension plans, insurance companies, etc. So "flight to safety" for the big players means Treasuries. Us small folks have the CD option, and for once being the little guy is an advantage.

What do you mean "for once"? The way I look at it, the little guy almost always has the advantage in the safe fixed income arena. The little guy can choose to buy CD's when they are advantageous, or treasuries when they are advantageous, or even savings bonds (I/E) when they happen to be advantageous. Not only that, but at auction, the big guys get exactly what they bid for a treasury (if they win the auction, obviously), while the little guy always gets the best bid.
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