The Ultimate Money Guide for Bubbles, Busts, Recession, and Depression

Chapter 10. THE SAFEST AND MOST LIQUID PLACE FOR YOUR CASH

With bubbles, busts, recession, and depression, it's not enough just to avoid losing money and preserving your savings; that's just one side of true safety.

The other, equally important, side that most people miss is liquidity—immediate access to your money, allowing you to actually have it in your hands and use it whenever you want to—without waiting; without penalties; and without bottlenecks, shutdowns, or disasters of any kind standing in your way.

That's your paramount goal in bubbles, busts, recession, or depression: Both capital preservation and liquidity.

Just remember that in the real world, absolute perfection is not possible. However, the single investment in the world that's at the top of the true-safety charts is short-term government securities.

I'm not talking about Treasury bonds, which are long term (from 10 to 30 years' maturity). And I'm not talking about Treasury notes, which are medium term (up to 10 years). I am referring strictly to Treasury bills (less than one year) or money market funds that own exclusively short-term Treasury securities (usually averaging less than 30 days in maturity).

You can buy them directly from the U.S. Treasury Department. Or for added convenience and liquidity, you can get them through a Treasury-only money market fund.

In recent years, because of the Fed's policy of reducing short-term interest rates to practically zero, the yield on Treasury bills has been a mere fraction of ...