----- Original Message ----- From: "Erik Reuter" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[EMAIL PROTECTED]> Sent: Monday, April 05, 2004 2:37 PM Subject: Re: Dan says SS = SSA
> On Mon, Apr 05, 2004 at 11:06:35AM -0700, Gautam Mukunda wrote: > > > Different types of risk, sorry. I'm slipping into financial sector > > jargon. US Government Securities (and all of the ones you are talking > > about are US Government securities) are all riskless assets. The risk > > referred to is the risk of default only - basically the risk of losing > > your nominal principal. The other stuff is, of course, relevant to > > calculations of your real risk, and stuff you should take into account > > in financial planning. > > And interest rate and inflation risk should be taken into account in > this situation, which is why I mentioned it. The SS trust fund will go > negative in not too many years. IIRC, this will happen in more than 30 years. Its the Medicare trust fund that is projected to go negative soon. >So it is NOT a long term investment. It will need to come up with the cash, and risking it on a 30 year bond > which could lose a lot of value when interest rates rise would be > foolish. That's why I assumed it was "invested" in shorter term debt. The mean length of the investment is just under 7 years from the site I quoted. BTW, I tried clicking on my own reference, and it didn't work properly. You need to go one level up to http://www.ssa.gov/OACT/ProgData/investheld.html And then chose OASI time series. Sorry about that. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l