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You guys are confusing MM ACCOUNTS (MMAs) with MM FUNDS (MMFs). They're two different things. MMAs are deposit accounts at a bank and ARE FDIC-insured. MMFs are mutual funds that invest in short-term debt, and THESE are the ones that broke the buck recently and are now being backed by the government (for a year).
The thing is, the government won't have to step in often, because most of the fund sponsers have, and will continue to (according to them), make good on their funds if/when they do break the buck.
I work for a mutual fund company that offers MMFs. The chance of them dropping below a dollar is extremely low. I doubt the Treasury department will ever have to do anything about their guarantee.
I know my company only invest in top tier securities and has never, ever broked below a $1 or come close to doing so.
What about just the average Joe who has money in an FDIC insured savings account? The FDIC states the money is insured to 100K but that doesn't mean you'll get penny to penny on the dollar. You could end up with .50 cents on the dollar. People don't think abou that. I mean would people really walk away with all their money if something were to happen? The Fed can't even manage it's own spending and runaway debt. Why should Joe Six pack think his savings account will be there?
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