Thread: Life-cycle funds could become TSP default option

Quips wrote:

There is no risk to lose money in the G Fund as there is no risk to lose money in the money market fund(s).

However, if decisions are made about one's private account without one's permission, it invites a very good chance of a lawsuit, just as shareholders have sued companies for malfeasance, i.e. Rite Aid, Enron, Merck, etc. etc. etc.

I argue that for the vast majority of people a 100% G Fund allocation IS losing money, and having a default allocation of 100% in either money market or bonds is poor - in fact, negligent - financial advice on the part of the 401k managers. How many credible financial advisors would recommend this kind of investment strategy? Risk-free is reward-free, as well. Again, changing the default allocation to an appropriate L Fund is NOT making "decisions about one's private account" that aren't ALREADY being made with the 100% G Fund default. Unless you're trying to say there should be no default at all, which is also unwise IMO.

"sophisticated blend of investments"

"Wild success"

heh...too funny.



Quips: see any of those black helicopters lately? hehe

It is naive to believe that TSP has the best interests of its participants or a participant in mind when it choses to allocate the funds in one's private account asit sees fit.

The risk of saving in the G Fund is inflation. It would take a lot of compound interest to overcome the friction and drag of a 30-40 percent drop in dollar purchasing power over the next 2-3 years. Our assets only do us as much good as they arecorrespondingly able to off-set future expenses. Products don't all of the suddenbecome worth morethan they were worth yesterday...the dollar simply is worth-less. The quicker people understand the fraudulent nature of a fiat currency, thebetter they will be able to protect themselves.

As long as we have out of control deficits, loss of our manufacting sector to Asia, continuing bankruptcies,and a negative U.S. savings rate...the dollar is going down. How far will the dollar go? As far down as it takes to rein in the deficits? How fast will it go? That strictly depends on the con-fidence game. Once confidence is lost it can go very fast and since the dollar is strictly a fiat currency with no underlying value other than the confidence which is placed in it...it is buyer beware.

Quips wrote:

It is naive to believe that TSP has the best interests of its participants or a participant in mind when it choses to allocate the funds in one's private account asit sees fit.

Exactly! We have to change this suspicious low-return default 100% G Fund allocation! Power to the participants, comrade! :^

Wimpy wrote:

The risk of saving in the G Fund is inflation. It would take a lot of compound interest to overcome the friction and drag of a 30-40 percent drop in dollar purchasing power over the next 2-3 years.

As long as we have out of control deficits, loss of our manufacting sector to Asia, continuing bankruptcies,and a negative U.S. savings rate...the dollar is going down. How far will the dollar go? As far down as it takes to rein in the deficits? How fast will it go?

A weak dollar helps American exporters; it also makes imports more expensive. That's the most important reason why American the largest of our trading partners buy Treasuries: to prop up the $

I can't see a thirty percent drop in the$ purchasing power overthree years. If the holders of those $$s/Treasuries would dump them for purchases, then that could happen, but the Fed is raising interest rates to make that option less attractive.

Our hope, I suppose, is that the US economy and consumer will retrench and growth based on debt. That is the macro picture. The micro picture I believe is an inflation rate based on an unexpected rise of a key natural resource, i.e. natural gas and oil that could potentially distort a market if those costs we added by every producer down the line .. in the supply and demand supply chain. Thus something like an inflation "virus" would infect the whole economy.

Apart from some disinflation from 2000 to 2003, prices are not apt to go down.

Now if the default option for TSP funds was based on an inflation based security, I think that would be not only good, but fair. But to default one's personal TSP-IRA into more risky vehicles stinks ... especially without the owner's consent.

The banking sector is part of America's service economy; it is my hope that it is out in the world tying up every other currency and commodity to keep our money worth something. Lots of luck.

So it seems like the American economy and FOMC accomodation of it has morphed into something machlavelian. One just needs to quote VP Chaney: "Deficits don't matter."

Deficits, fiscal or trade, do not matter to a system turned bankrupt. Appearances do matter though. Some would call that confidence.American fiscal policies are hemorrhaging red ink and its bonds are being snapped up by nations that are exporting to it. But we are keeping their people working and its factories humming. Yetthose foreignersare indirectly being paid (lots of luck) via their nation's purchase of US Treasuries.

The current world economy is based on such a system. Any nation that finds a way around that has found a tool more powerful than any nuclear device. Just try to find it though! The alternative is to throw billions of people out of work. And then what? The world economy and the purchasing power of its largest consumers (the West) is wrecked. It is like cutting off ones nose to spite one's face. The largest beneficiaries for such a strategy are countries that are the least developed since they have the least to lose, i.e. there is less disruption to their minimalist/survivalist lifestyles.

However, apprearances DO matter. There has to be SOME semblance of order. A nation or nationscan't just simply gangster the lion's share of the world's resouces by fiat. And so a balance needs to be maintained whether it is in natural resources/commodities or wages.

Word is that the wealthiest 2-3% of the people control 90% of the nations wealth; even if the amount of those people were doubled (4-6%) or tripled (6-9%) that is still a lot of wealth held in the hands of a comparative few. I would guess they have the most to lose ... so, how are they holding their wealth?

Gold? Whoa! When will gold ever cease to shine? Well, it couldloseitsluster tobillions of unemployed and disgruntledpeople out of the means to provide for themselves or their families due to a bankrupt system?Too little gold to go around for too many unemployed and disgruntles who, if they saved at all, did not hold their savings in bullion.So that won't work either.

What may "work" is if somebody did a Freddy the Freeloader and replicated a lifestyle based on America's current economic system, but the bankruptcy laws have be tightened lately you know.

:l:!