Government bonds are used as a broadly risk-free asset against which other financial instruments are priced (see article).

ECONOMIST: Coping with surpluses

That is not bad for a risk-free asset with a maturity of one to six years in theory, and often only a few months in practice.

ECONOMIST: India's finances

Unfortunately, because QE involves the exchange of one risk-free asset (bank reserves) for another (Treasury securities), QE does nothing to increase the amount of risk-free assets available to the market.

FORBES: We Need QE3 Like We Need A (Jackson) Hole In The Head

Mutualising part of the national debts would create a risk-free European asset.

ECONOMIST: Charlemagne

This currency could serve as a risk-free global asset.

ECONOMIST: Reserve currencies

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FORBES: Connect

As for risky markets, there is some uncertainty over a longer term, when most asset pricing models use the US rates as the risk free rates.

FORBES: Panic Selling Of US Treasurys Unlikely

The prices assigned to Treasury securities the risk-free rate are the foundation from which the price of virtually every asset in the world is calculated.

WSJ: Kevin W. Warsh: The New Malaise and How to End It

Only a few short years ago, many financial planners insisted that stocks become virtually risk-free if you just hold on to them long enough, guaranteeing you a higher return than any other asset.

WSJ: The Intelligent Investor: Lessons From the Iditarod

The use of the Fed to peg nominal interest rates at artificially low levels, fine tune the yield curve, incentivize risk taking, monetize government debt, and inflate selected asset prices by allocating credit are deviations from sound money and free markets.

FORBES: The Fed's Incredible Rate Forecasting Hubris