Just a helpful reminder to those who may have any money sitting in Money Market Funds...
...Now is the time to start thinking about rounding up any loose/risky cash and move it into T-Bills.
Don't forget to protect your cash
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Don't forget to protect your cash
Last edited by Gumby on Fri Aug 05, 2011 7:01 am, edited 1 time in total.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
Re: Don't forget to protect your cash
I have most of my cash in the Vanguard Short-term Treasury Bond Fund, but I do keep about 6 months' worth of emergency funds in the Vanguard Prime MMF.
From other discussions on this forum, I got the general impression that it would basically take Armageddon--not just a 2008-style financial meltdown--to freeze up the commercial money markets. I'm not familiar with all the mechanics regarding how the money markets work, but aren't the Treasury and commercial money markets very closely intertwined? In other words, if the commercial money markets were to freeze up, wouldn't the Treasury/Fed have a huge incentive to step in immediately and provide liquidity to unfreeze them?
From other discussions on this forum, I got the general impression that it would basically take Armageddon--not just a 2008-style financial meltdown--to freeze up the commercial money markets. I'm not familiar with all the mechanics regarding how the money markets work, but aren't the Treasury and commercial money markets very closely intertwined? In other words, if the commercial money markets were to freeze up, wouldn't the Treasury/Fed have a huge incentive to step in immediately and provide liquidity to unfreeze them?
Re: Don't forget to protect your cash
Money markets are not safe - the Reserve broke the buck and I don't know if people who had money in it have even gotten it back yet. See http://en.wikipedia.org/wiki/Reserve_Primary_Fund.