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Thread: How SAFE is the G Fund?

  1. #1

    Default How SAFE is the G Fund?

    I am 100% in G. Now I am hearing the US Treasury is the Biggest Debtor in the world so is it possible for the money in the fund to just evaporate like the money invested in the stock market last October! I am beginning to think I should withdraw the money to one of Safety-I am getting SCARED!


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  3. #2

    Join Date
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    Default Re: How SAFE is the G Fund?

    I asked much the same question when I first found this site. The answer I got was that if the G fund evaporated that that would be the least of your worries. I think the discussion moved to Mad Max after that.

    Today I started clearing the "out parcel" that I own next to my house so I could plant a large garden this spring...

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  5. #3

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    Default Re: How SAFE is the G Fund?

    Gardening is a good answer but specifically inflation is your real fear.
    Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."

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  7. #4

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    Default Re: How SAFE is the G Fund?

    Quote Originally Posted by Show-me View Post
    Gardening is a good answer but specifically inflation is your real fear.
    Yes. I am worried about inflation. I've asked here many times but haven't gotten an answer yet...

    When's the inflation going to hit and what can we do to prepare for it?

  8.  
  9. #5

    Join Date
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    Default Re: How SAFE is the G Fund?

    It is a tough question to answer but I will try.
    Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."

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  11. #6

    Join Date
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    Default Re: How SAFE is the G Fund?

    Inflation is effected by many factors.

    1. Money supply - How much actual money is printed by the US. The more you print the more it dilutes the value of the money that is already in your pocket.

    2. Fed. Funds Rate - This is market value of our US Treasuries that we rely on heavily to fund our Govt. due to deficit spending. If our rate is zero and Germany is giving 2%, why would China buy our Treasuries.

    3. World perception - The US dollar was considered the fail safe currency and this is why gold and oil is traded world wide in dollars. We are failing to provide that confidence and there is talk of trading oil in Euro's.

    I'm sure I missed some things and some point but that is the general layout.

    Basically we are seeing a deflation of all commodities due to a weakening world economy. IMO, once we hit rock bottom inflation will kick in. Just look at historical graphs of gold prices from the Great Depression forward and you will see a pattern.

    We can not predict when it will hit. How to prepare for it is to delay retirement and take advantage of the COLA. Buy a small position of Gold to hedge against inflation. Food inflation will hit so gardening and chickens could be helpful. Owning some energy sector.
    Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."

  12.  
  13. #7

    Default Re: How SAFE is the G Fund?

    Quote Originally Posted by msymonds View Post
    I am 100% in G. Now I am hearing the US Treasury is the Biggest Debtor in the world so is it possible for the money in the fund to just evaporate like the money invested in the stock market last October! I am beginning to think I should withdraw the money to one of Safety-I am getting SCARED!
    Msymonds,
    FIRST of all WELCOME to the MB.

    This is probably the very worst condition our economy has ever been through - DURING YOUR LIFE FOR SURE - and believe it or not it is highly likely to get a lot worse before it gets better.

    THE MOST IMPORTANT THING TO REMEMBER NOW IS THAT YOU ARE GOING TO HEAR A LOT OF DOOM AND GLOOM - AND FOR MANY THROUGHOUT THE COUNTRY AND THROUGHOUT THE GLOBE THINGS ARE INDEED GOING TO BE TERRIBLE

    ALL THAT NEEDS TO BE SEPERATED FROM THE TSP ACCOUNT AND ALL FUNDS WITH IN TSP - ESPECIALLY G FUND.

    Do not buy into the HYPE my friend - because that's all it is.

    We have to believe in something and their is absolutely nothing wrong with believing in the U.S.A. and knowing our country will keep the G Fund and our TSP Safe.

    I am fully in G Fund and will likely use that fund 100% through most of this year. To use any other fund MARKEDLY INCREASES your risk of LOSS.

    So the FOCUS should be: Does G Fund guarantee NO LOSS despite however the Economy and the Markets are responding. To leave G out of fear and stay in C/S/I will only make you realize how foolish it was to leave G Fund.

    THE VERY BEST WAY TO INVEST IN THE TSP IS BY FULLY BELIEVING IN ALL 5 FUNDS. THAT GIVES A HUGE PEACE OF MIND AND THE FULL ASSURANCE THAT YOU'VE MADE THE RIGHT DECISIONS.

  14.  
  15. #8

    Join Date
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    4,124

    Default Re: How SAFE is the G Fund?

    Quote Originally Posted by Show-me View Post
    Inflation is effected by many factors.

    1. Money supply - How much actual money is printed by the US. The more you print the more it dilutes the value of the money that is already in your pocket. Agreed. Some of the articles and commentaries I've been reading suggest the Treasury will drain/resorb some of that excess money supply when they think it safe to do so, to help contain that inflation factor/dilution of value), put us back into low-moderate inflation condition.

    2. Fed. Funds Rate - This is market value of our US Treasuries that we rely on heavily to fund our Govt. due to deficit spending. If our rate is zero and Germany is giving 2%, why would China buy our Treasuries. (exactly-our Treasuries will be sold to buy German value (best deal in Europe right now), creating excess supply of treasuries that will need to be repatriated back to the U.S.-read increasing interest rate as T-bond prices fall.)

    3. World perception - The US dollar was considered the fail safe currency and this is why gold and oil is traded world wide in dollars. We are failing to provide that confidence and there is talk of trading oil in Euro's. (timing and actuality of any such change is the biggest unknown)

    I'm sure I missed some things and some point but that is the general layout.

    Basically we are seeing a deflation of all commodities due to a weakening world economy. IMO, once we hit rock bottom inflation will kick in (yep-how high it will be allowed to go is another of the big unknowns, see #1, remember Volker, the early 80s). Just look at historical graphs of gold prices from the Great Depression forward and you will see a pattern.

    We can not predict when it will hit. How to prepare for it is to delay retirement (part of my considerations for decision-making between 2017-2023) and take advantage of the COLA.
    Buy a small position of Gold to hedge against inflation. (It's somewhere on the list, other ideas coming first tho for me-hope I'm not sorry I dilly-dally).
    Food inflation will hit so gardening and chickens could be helpful. Already working on the gardening angle, contemplating chickens as next step after that. Our families survived Depression and WWII with home gardens.

    Owning some energy sector. Still trying to decide when and which part of the sector but it's on the list.
    For the record, I'm not concerned re G fund either. That's as safe as we can get and still have funds and lives and jobs in the U.S.
    "life can only be understood backwards, but it must be lived forwards" - soren kierkegaard

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  17. #9

    Default Re: How SAFE is the G Fund?

    What happens to the TSP funds if Barclays is nationalized like some of the other European banks?


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  19. #10

    Join Date
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    Default Re: How SAFE is the G Fund?

    I would say nothing, Barclays only manages the account. The account belongs to TSP and is housed in the US.
    Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."

  20.  
  21. #11

    Default Re: How SAFE is the G Fund?

    Quote Originally Posted by Show-me View Post
    I would say nothing, Barclays only manages the account. The account belongs to TSP and is housed in the US.

    Finally !!!

    That is the bottom line and hopefully we can put this to rest.

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  23. #12

    Default Re: How SAFE is the G Fund?

    From what I read, I am under the impression Barclays carries the TSP funds as assets?

    The Barclays executives assured the thrift board that TSP assets are protected if Barclays encounters problems with borrowers who cannot live up to their contractual obligations or default on loaned securities.

    Blake R. Grossman, chief executive of Barclays Global Investors, and H. Michael Williams, a managing director at the firm, told the board that borrowers put up cash as collateral when obtaining a loan or securities from the TSP. Williams said Barclays also relies on independent financial reviews, credit ratings and on-site visits when establishing credit limits for borrowers.

    There have been only two defaults in the history of Barclays's lending program, but Barclays and its clients did not suffer any losses, Williams said.

    In the unlikely event that Barclays ever fell into bankruptcy, Grossman said that trust and regulatory laws shield TSP assets from creditors. Asked by Alejandro M. Sanchez, a board member from Florida, if TSP assets were "locked in a room" and kept separate from other assets managed by Barclays, Grossman said yes.
    http://www.washingtonpost.com/wp-dyn...102976_pf.html

    "Barclays executives assured the thrift board that TSP assets are protected"

    "unlikely event that Barclays ever fell into bankruptcy, Grossman said that trust and regulatory laws shield TSP assets from creditors"


    What if they are nationalized?

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