Thanks Oldtrader. This is what I'm getting at. Even SIPC insurance stops at 500k. For greater amounts I guess SIPC can use any of your money greater than 500k to, essentially, satisfy the claims of other people. Where can I keep t-bills where nobody will ask me to be happy with returning just a portion of my own money? If I go through the site, does anybody know where the t-bills will be held, and what the real terms of partial confiscation would be? SIPC, FDIC and many others will confiscate part of your money, if it's a large sum, in times of difficulty.
Correct me if I am wrong, but what if you opened up a handful of bank accounts and purchased t-bills directly with Fed Direct. All the while making sure that each individual account is below the threshold limit for coverage. Senor Zen
that's exactly right. For a portion of Bill gates's liquid net worth, he has thousands of bank accounts, each deposited exactly at 100K - FDIC insured amount.
At first I laughed when I read this. Then I realized what site this was and considered you actually might be serious! :eek:
By buying TIPS you are assuming the government can accurately measure inflation. It is in the government's interest to declare inflation low when it might not be. Just something to consider.
Concur. You might be very sorely surprised one day. I would put TIPS in the same hedge category as precious metals - 5% of your portfolio, more if you are paranoid.
What's this? You thinking that the govt will default on tbills but somehow pay off FDIC? Wow, must have been a shipment of fresh ganja this week.
If you use the Treasury Direct website, you will open an account with the US Treasury. Your T-Bills are a book entry with the US Treasury Department. This is as safe as it gets. The T-Bills are a direct obligation of the Federal government, held for you by the US Treasury, a department of the US Government. If you have them held at a bank/broker, you take on an additional risk, albeit small. Plus, you will pay a fee to them for buying the T-Bills for you. You can buy direct without fee. The advantage that a broker would have is that you could use the T-Bills as collateral for a trade if you chose. This will not be possible at the bank or with the US Treasury direct. But if safety is the concern, T-Bills bought direct through the US Treasury is as safe as it gets. OldTrader