The Safest Places To Save Your Money

This is the 'helpful' and 'expert' advice our local television news program (CBS affiliate) offered to those looking for safe havens for their money. I know...why would anyone take the advice of a television 'expert'? Well, not everyone can afford their own financial advisor.

I particularly enjoyed this paragraph:

Investing in a money market mutual fund can really pay off. Ronchi says the interest rate recently has been up around 5%. That's probably higher than the average savings account or money market deposit account at your bank.

The downside?

Check for possible fees, they're not FDIC insured - though experts say the risk is low-and for Ronchi, "The money market mutual funds are in some senses more difficult to get at if you're not familiar with investing."

http://www.keyetv.com/content/news/topnews/story.aspx?content_id=4c9b9033-fc8e-4311-a7a3-d9752dc28662

Huh?



5%...now THERE's some incentive. Boy that mattress is looking better all the time...

Buy food and tools and books, pay off home, buy canning goods and chickens. Have get togethers with friends and neighbors and help each other.

ITA. These things are what gets you through the hard times and is how humans have survived and flourished over the millennium. I count my pantry like money in the bank and it has saved me during a protracted hard time (the RE bust and depression in Houston in the late 80's).

can't you just get an FDIC insured account? I mean, you're not making squat either way. :shrug:

Not if there was a major bank failure across the board. But then we'd likely all be in the same boat anyway so ....whatever.

There is no incentive to save in this economy, that's for sure.
And fewer and fewer places to safely invest. We've hit a wall.

Bank panics are bad for business, especially if all the customers and businesses lose their money. I don't think big business (our real government) would allow the FDIC to default -- money would be found somewhere, even by (gasp!) raising taxes. If it were so bad that they couldn't bail out the FDIC, then, well, let's not even think about that... :scared:

no matter where you store it

http://www.gfmag.com/index.php?idPage=612

At the end of the day it's the bank itself that determines its safety, not whether or not it's FDIC insured. There are banks to borrow money from and there are banks to make deposits in. An easy test is to check their loan requirements. Easy to get an unsecured loan? You may want to deposit someplace else.

Banks take deposits and depending on their reserve requirements (and/or reserve policies) lend out more than they have on deposit. So it depends on reserves, loan portfolio quality and internal efficiency. An example of inefficiency: In Japan I needed to exchange 20 USD to Yen. It took 3 people and nearly an hour.

5% is a reasonable retun on an investment. We've been pulled into a minus-sum gain by gambling in the markets trying to make a fortune in a short amount of time.

if you're investing in a financial instrument that is not insured, often comes with service charges, and is taxed as regular income.

....lessee:

#8. Wells Fargo. Nope, they're going under.

#11. Citi. Them, too.

#14. Societe Generale. LOL!

23. Deutsche. Heard some bad rumors 'bout them...

24. Bank of America. Please, stop, you're killin' me!

25. HSBC. Hardee har har...

Those are just creme de la creme of insolvency, so far.

I could go on about the others *I* know about, but that's about 60-75% of that list...

... Citi will probably not go under, their shareholders just won't get dividends for a couple years.

But, I get your point :)

from Jan 22:

to the fact they spent a big chunk of their oil money on debt derivatives...and they are saying...we can handle sub-prime defaults...no problem.

Damn, are they going to be surprised.

edit:

Personally, for me, that is the only bright spot in all this. Helps with that whole Muslim terrorist thing nicely.

I'm not losing sleep over this. On one level, it kinda makes me proud to be an American.

;-)

You can get your US cash exchanged much faster at an international airport-- and the rates are usually better. "Toshi ginko" ("urban banks") are also a little faster and more efficient.

At the same time, where could you go in the US to exchange 2000 yen for US currency-- and how long would that take? No doubt at a lot of banks, the teller would have to ask a couple of supervisors about it, and you might end up having to go somewhere else because they don't know anything about Japanese money.

http://onlinejournal.com/artman/publish/article_2879.shtml

And it seems the elite (US leaders and Bilderberg Group elite) screwed it up.

If this fails to insure money, there will be bank runs and panics into commodities, desperation and fear in the streets. The powers that be cannot let FDIC insurance fail.

They can reflate out of this mess. The Fed is keeping short term rates so low so that banks can basically have free money, buy some other stuff, and make money on the spread, and improving balance sheets. It worked in the early 90s and they are trying the same thing again.

The whole point of Treasury Direct is the return of capital in a situation where the SHTF. It is the bank of last resort, and it is well above FDIC in terms of its security as a cash park, the 4-week bills are hard to beat. They roll over as you'd think every 4 weeks; if you put equal amounts into each week of a 4-week cycle you can "cash out" any time you'd like, and until then, just roll it over.

Think of it as the Bank of Sealey backed by 6,000 nuclear weapons, with a 4-week maximum hold to extract it at PAR.

For small amounts of money, the Bank of Sealey is fine, and you ought to keep physical cash handy.

Think of T-Direct as a cash park with a bit of interest, and 100% safety beyond the $100,000 FDIC limits - unless the Fed government folds, in which case not much matters except steel, bras and lead.

There is an ETF for 4-week T-bills (there is still an intermediary between you and your money):
http://finance.google.com/finance?q=AMEX%3ABIL

For those wary of the ETF, go direct:
www.treasurydirect.com

edit:

I'm going to make this a thread of it's own, so it won't be missed.

I get three month t bill rates at 2.2%. I can get a three month CD for 3.65%.

That is a big difference. I'll take FDIC insured CDs! You can do the same thing with CDs rolling over to have cash available at all times.

I agree that the treasuries are a tiny bit safer, but not enough to make up the difference in rates.

I am going by what Schwab is offering, so I hope I quoted rates that are current.