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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Nadine Carroll who wrote (92841)	11/3/2001 9:35:55 AM
From: Tommaso	Read Replies (1) \| Respond to of 132070

That's an awfully good question. Since the bond funds I hold (BEGBX and the closed-end FAX) are in non-US currencies, I am continuing to hold them because I think the dollar is overvalued by at least 10% and maybe 20% against those currencies. If I held a bond fund that had benefited from the recent interest rate declines, and if I could get long term capital gains tax treatment on it, I think that I might sell it and put the money into T-bills or maybe just FDIC insured money-market bank accounts. The interest rates are minimal now and it would be very boring, but I think the name of the game may be capital preservation right now with emphasis on safety. Let me ask you a question. Do you, or does anyone reading this, foresee any situation where brokers might get into a tight situation and be unable to deliver stock certificates or write checks if one wanted to cash out of an account? That would be my own nightmare. I think that maybe the Fed's easy credit and easy money policies are intended to prevent banking and other financial panics. EDIT: I really wouldn't be in any hurry to get out of any U. S. Government bonds or bond funds. My only concern would be NOT to be in anything long term when (as I believe) inflation picks up and eventually interest rates reflect fears of inflation. There are still government bonds out there with those 14% rates to remind us of what can happen.