Treasury Direct account security discussion at Bogleheads

Discussion of the Cash portion of the Permanent Portfolio

Moderator: Global Moderator

User avatar
jhogue
Executive Member
Executive Member
Posts: 300
Joined: Wed Jun 28, 2017 10:47 am

Re: Treasury Direct account security discussion at Bogleheads

Post by jhogue » Sat Feb 16, 2019 9:02 am

ochotona wrote:
Thu Feb 14, 2019 3:10 pm
If you really want to own a security with a TIPS feature, I think it would be something like iShares 0-5 Year TIPS Bond ETF (STIP), yields 2.42% now.
There are problems with the use of TIPS for the HBPP:
1. In a deflationary scenario, the principal value of TIPS declines. US savings bonds will not decline in value.
2. Accrued interest on TIPS is taxable. Interest on US savings bonds are tax deferred for up to 30 years.
3. STIP has a net expense ratio. US savings bonds do not.
4. STP is an ETF, which have an institutional manager risk. US savings bonds do not.

I have suggested the use savings bonds on this forum as an appropriate cash alternative-- or “Deep Cash” -- for those interested in their unique features and frequent higher yield. I still think they are. If they don’t fit your investment plans, you are certainly free to do without them.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
User avatar
ochotona
Executive Member
Executive Member
Posts: 2430
Joined: Fri Jan 30, 2015 5:54 am

Re: Treasury Direct account security discussion at Bogleheads

Post by ochotona » Sat Feb 16, 2019 3:07 pm

My credit union will redeem paper bonds. I can use them to some extent securely.
User avatar
ochotona
Executive Member
Executive Member
Posts: 2430
Joined: Fri Jan 30, 2015 5:54 am

Re: Treasury Direct account security discussion at Bogleheads

Post by ochotona » Thu Mar 07, 2019 9:44 am

I am going to keep buying electronic I-Bonds. But I won't convert my paper ones to Electronic. And when I turn 65 in a little more than seven years, I will sell all of the I-Bonds during my age 65-70 pre-Social Security window, and close the account, and keep buying paper bonds, as long as they keep selling them. And I'm changing my password every 90 days.
User avatar
jhogue
Executive Member
Executive Member
Posts: 300
Joined: Wed Jun 28, 2017 10:47 am

Re: Treasury Direct account security discussion at Bogleheads

Post by jhogue » Thu Mar 07, 2019 4:46 pm

I am not ready to hit the panic button over Treasury Direct’s annoying inability to assume full responsibility for the security of transactions in its electronic accounts. Their klunky written responses to the boglehead investor [above] remind me of why people hate dealing with august institutions like the US Postal Service or you local Department of Motor Vehicles.

That said, US savings bonds are US Treasury-issued debt instruments. With trillions held by the USA’s trading partners, and trillions more held domestically by individuals, banks, insurance companies, and corporations, I can’t see a credible scenario in which a Treasury Secretary would do anything that jeopardizes global perceptions of their safety, liquidity, and yield.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
User avatar
ochotona
Executive Member
Executive Member
Posts: 2430
Joined: Fri Jan 30, 2015 5:54 am

Re: Treasury Direct account security discussion at Bogleheads

Post by ochotona » Thu Mar 07, 2019 5:51 pm

Maybe if I want to write my Letter to an Important Person, I'd ask that I-Bonds be transferable to a brokerage account. Not that they be made sellable on the secondary market, but just that thy could be sent out of TD.
User avatar
jhogue
Executive Member
Executive Member
Posts: 300
Joined: Wed Jun 28, 2017 10:47 am

Re: Treasury Direct account security discussion at Bogleheads

Post by jhogue » Thu Mar 07, 2019 6:11 pm

Your post prompts a good question:

Why can't Treasury outsource the management of Treasury Direct to one or more brokerage firms?
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
User avatar
pugchief
Executive Member
Executive Member
Posts: 2643
Joined: Tue Jun 26, 2012 2:41 pm
Location: suburbs of Chicago, IL

Re: Treasury Direct account security discussion at Bogleheads

Post by pugchief » Thu Mar 07, 2019 6:55 pm

jhogue wrote:
Thu Mar 07, 2019 6:11 pm
Your post prompts a good question:

Why can't Treasury outsource the management of Treasury Direct to one or more brokerage firms?

Because everything the government does is cheaper and more efficient than the private sector, don'tcha know? :P
User avatar
ochotona
Executive Member
Executive Member
Posts: 2430
Joined: Fri Jan 30, 2015 5:54 am

Re: Treasury Direct account security discussion at Bogleheads

Post by ochotona » Fri Mar 08, 2019 5:17 am

Love the spellign.


Hello Peter,

Thank you for your recommendation towards improvements to TreasurDirect.

We appreciate your investment in TreasuryDirect.

Treasury Services
ppnewbie
Associate Member
Associate Member
Posts: 41
Joined: Fri May 03, 2019 6:04 pm

Re: Treasury Direct account security discussion at Bogleheads

Post by ppnewbie » Fri May 17, 2019 1:55 pm

This discussion is very helpful as I am trying to figure out where to park my treasury bonds and bills.
Post Reply