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To: Sr K who wrote (88715)	9/10/2007 2:55:49 PM
From: patron_anejo_por_favor	Respond to of 306849

FCB is foreign central banks. 3-month T-bills are "risk-free" in the sense that the US government can always churn out currencty to meet that obligation. It's risk free relative to other debt instruments where the return of principal is not as likely. Of course, the value of the currency has a risk of it's own, but there is no (other) principal risk involved. If the dollar drops, say 5% over the 30 days you're holding a T-bill, then there is obviously risk involved (same as with holding any currency-denominated asset). This is one of the arguments for gold, BTW, that it doesn't represent an obligation by any other party and therefore is immune (in theory) to counterparty risk. CD's by banks are riskier in that if the bank goes under, you will only get your principal back when the FDIC gets around to paying it (and they pay only up to $100,000 per CD account). Still pretty safe, but the chances of some kind of hitch are higher. This was one reason some Countrywide CD holders were nervous in mid-August when Merril and others were talking about their chances of going bankrupt.