When MF Global went bankrupt, those holding treasuries suffered haircuts as the segregated funds losses were divided equally among all the clients, no matter what the assets were. But, that was a commodities brokerage, not a stock brokerage. At a stock brokerage, you would have SIPC protection which does apply to cash, up to $250 k IIRC. (But, how many assets can SPIC afford to protect?)
No. At least MF Global says no. You used to be able to buy treasuries at the local Fed. I don’t think they do that anymore.
Buy direct, cut out the middleman, your broker.
Not risk free though, you will be paid back with devalued dollars.
I would suggest to eat, drink, and be merry. For tomorrow you will die.
The currency either becomes worthless immediately ( not gonna happen) or loses value due to rapid inflation.
Much more likely could be a Cyprus-like scenario, when there is an extended bank holiday. Given that banks pay zip, nada, zilch in interest..you might feel better keeping more cash on hand..say 6 months worth..assuming you have a safe, and/or a safe, and fire-proof place at home to keep it..
Broader perspective..it makes more sense now to consider having a greater % of your assets in gold. ( I personally think the stock markets will correct at least 30% ( if not more) before the 2014 election..so again the question, if you own gold..is where to keep it...having physical possession of some ( if not all..depending on the amount..) makes more sense than ever now...again, assuming you have a secure place to keep it..
You will retain your initial deposit, generally speaking. BUT every time the Fed injects $85b into the system, your money is devalued.
If your desire is to maintain “value” you should invest in real assets (land, precious metals ,etc.). If we suffer deflation, those assets will decline in price—but so will everything else.
When the system collapses entirely...it really doesn’t matter. You will own what you can protect or carry with you.
About the only financial organization worthy of some trust today is USAA. If anyone in your family is a veteran, you can sign up with them. They are run and operated by prior service military. Among other benefits:
1) Their auto and home insurance rates are lower than *any* other insurer. Some complaints, but far fewer than other insurers as well.
2) They offer tax free short, medium and long term muni bond funds. USTEX Tax Exempt Long-Term Fund, for example, maintained a 4.5-5% yield until the last year, when so many people have moved their money into it as a safe haven that its yield has dropped to its current 3.87% annual. Which is still a heck of a lot better than most taxable yields of twice+ that much, especially with the loss of low capital gains taxes.
treasuries and bank collapse in a mkt correction
Personally I think the only really safe things to buy are food, gold, silver and land.
Seems like this question is like “Should I wear an automatic inflating life vest because I see this 100 ft. high tsunami headed this way?” I guess its like writing our Social Security numbers on our arms and legs with permanent marker.
America is so $Cr*w*d! America, when serious people have to consider such questions.
1 MO=0.06%
3 MO=0.075%
6 MO=0.106%
1 YR=0.130%
2 YR=0.246%
3 YR=0.356%
5 YR=0.769%
10 YR=1.863%
30 YR=3.106%
As I broker whom does NOT know you or your suitability, I won't make recommendations for you specifically.
I am allocating my clients into select municipal bonds such as a 2 year bond I sold this AM. This is triple tax exempt for him since he lives in that area from city/county, state, and federal income taxes:
DEER CREEK CO MET DIST REF
Coupon= 2.000%
Maturity: 12/1/2016
Price=$103.215
Yield=1.100%
Tax equivalent yield (TEY) = 1.97%
+30bps over 2yr.
I would buy Series-I savings bonds. Those you can hold directly, so no chance of losing money because of a brokerage problem.
And if the fed fixes things by driving up inflation, the I-series savings bonds technically will keep up.
If they devalue the currency, it won’t matter what you are in; you’d need to be in foreign stocks or foreign currency to make money in a devaluation.