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Families hoard cash 5 yrs after crisis

NEW YORK (AP) — Five years after U.S. investment bank Lehman Brothers collapsed, triggering a global financial crisis and shattering confidence worldwide, families in major countries around the world are still hunkered down, too spooked and distrustful to take chances with their money.

An Associated Press analysis of households in the 10 biggest economies shows that families continue to spend cautiously and have pulled hundreds of billions of dollars out of stocks, cut borrowing for the first time in decades and poured money into savings and bonds that offer puny interest payments, often too low to keep up with inflation.

"It doesn't take very much to destroy confidence, but it takes an awful lot to build it back," says Ian Bright, senior economist at ING, a global bank based in Amsterdam. "The attitude toward risk is permanently reset."

A flight to safety on such a global scale is unprecedented since the end of World War II.

The implications are huge: Shunning debt and spending less can be good for one family's finances. When hundreds of millions do it together, it can starve the global economy.

Weak growth around the world means wages in the United States, which aren't keeping up with inflation, will continue to rise slowly. Record unemployment in parts of Europe, higher than 35 percent among youth in several countries, won't fall quickly. Another wave of Chinese, Brazilians and Indians rising into the middle class, as hundreds of millions did during the boom years last decade, is unlikely.

Some of the retrenchment is not surprising: High unemployment in many countries means fewer people with paychecks to spend. Some people who lost jobs got new ones that pay less or are part time. But even people with good jobs and little fear of losing them remain cautious.

"Lehman changed everything," says Arne Holzhausen, a senior economist at global insurer Allianz, based in Munich. "It's safety, safety, safety."

The AP analyzed data showing what consumers did with their money in the five years before the Great Recession began in December 2007 and in the five years that followed, through the end of 2012. The focus was on the world's 10 biggest economies — the U.S., China, Japan, Germany, France, the United Kingdom, Brazil, Russia, Italy and India — which have half the world's population and 65 percent of global gross domestic product.

http://news.yahoo.com/ap-impact-families-hoard-cash-5-yrs-cr...



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US Nickels are the best commonly circulated monetary value.

US Nickel, real money value. No fees. No commission. Made of 25% nickel & 75% copper. With an exception of the War Nickels 1942-1945 (56% copper, 35% silver, and 9% manganese minted during World War II).

Made in USA.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

How have you been Mr Twain?

I missed your great wit most of all while I was gone my friend. I hope you have been well.

"The holy passion of Friendship is of so sweet and steady and loyal and enduring a nature that it will last through a whole lifetime, if not asked to lend money".

-Pudd'nhead Wilson's Calendar

If I disappear from a discussion please forgive me. My 24-7 business requires me to split mid-sentence to serve them. I am not ducking out, I will be back later to catch up.

Americans

are only saving 4% of their income. We are one of the worst in the world at saving.

"Endless money forms the sinews of war." - Cicero, www.freedomshift.blogspot.com

US Treasurer Rosie Rios issues "Lucky-Money" @ Treasury.gov

US Treasury issues 'lucky money' for Chinese dragon year, Chinese News Service ® 2011-11-16

Washington DC (CNS), 2011: A limited edition of 108,888 uncirculated note. "Lucky-Money" celebrates Chinese year of dragon; "Lucky-Money" put on sale on the official website of the U.S. Treasury... The Lucky-Money Collection is the only money product issued by the U.S. administration since 2000, and is proving hugely popular among global Chinese.

"The Dragon is considered the most desirable of zodiac symbols, and these 108,888 Year of Dragon products comprise the largest edition ever offered in our Lucky-Money Collection," said Treasurer Rosie Rios.

With a daughter & herself born in the year of dragon herself, Rios called herself a little snake (dragon), and wished everyone a year of good fortune and prosperity. [No mention of debt-based cash nor inflation.]
---
The Fed: Loaning you blind, since 1913.

China News Service ® (CNS) notice: State-level news agency sponsored and established by Chinese journalists and renowned overseas Chinese experts on October 1, 1952. This website is not just an English version of ChinaNews (www.chinanews.com.cn), the official Chinese-language website of CNS launched in 1999.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Gold, Silver and Nickles

.

If I disappear from a discussion please forgive me. My 24-7 business requires me to split mid-sentence to serve them. I am not ducking out, I will be back later to catch up.

Nickels?

Why nickels?

Ron Paul convert from the Heart of Dixie

They are correct

Nickles are the only currency readily available that have almost the same metal value as face value. So if the dollar crashes and metal becomes the bar to reach they will hold that value and even increase very substantially. 5 cents face almost 5 cents metal value. I have seen the nickle worth almost 7 cents in metal value. Point is, you will not lose the face value of the coin if the dollar crashes. If you want to bury your cash in the backyard nickles are the best investment for a currently minted coin. All Paper will be worthless.

If I disappear from a discussion please forgive me. My 24-7 business requires me to split mid-sentence to serve them. I am not ducking out, I will be back later to catch up.

who's going to melt US

who's going to melt US property?

Lol

Serious? lol

If I disappear from a discussion please forgive me. My 24-7 business requires me to split mid-sentence to serve them. I am not ducking out, I will be back later to catch up.

You mean-

Federal reserve property?

.

1946-2013 Jefferson Nickels still retain 75% copper/25%nickel. At the current price, it's worth about $0.044 in melt value.

Pre-1982 US Pennies are 95% copper bringing their melt value to $0.021.

Really good site to reference is http://www.coinflation.com

Prior to 2013, nickels had

Prior to 2013, nickels had actual nickel in them.

Simple Facts and Plain Arguments
A common sense take on politics and current events.

www.simplefactsplainarguments.com

Actually they are still the same.

Coinflation has 2013 Nickles valued the same as previous so they still have the same metal content.

http://www.coinflation.com/

If I disappear from a discussion please forgive me. My 24-7 business requires me to split mid-sentence to serve them. I am not ducking out, I will be back later to catch up.

If their money is in savings and bonds then they are not

hoarding. And it is still at substantial risk of being confiscated by the banker thieves. Kinda like if your silver or gold is in paper.

fireant's picture

"Savings and bonds" is NOT cash.

Savings and bonds are exposed to the risk generated by whatever institution is holding them. "Cash" is C-notes under the mattress.

Undo what Wilson did

Hoarding cash is pointless.

If, or should I say when, the dollar collapses, holding paper does no good. I completely understand why people who don't understand a banker ponzi scheme would hoard their paper money. They are hedging their bets through the rose colored glasses of a normalcy bias.

fireant's picture

No one knows the future, esp "when".

It may be quite some time before the $ loses reserve status and crashes. In the interim, it is highly possible to see bank runs and scarcity of dollars. Think Cyprus. Cash was king, but no one could get any if they didn't already have some.
Hoarding cash is not pointless. This isn't an either/or game, but one of being wise in the allocation of one's wealth, and all eggs in one basket is never wise.

Undo what Wilson did

Bingo!

You've nailed it. The article's definition of "cash" is misleading and your example of Cyprus is spot on. Very few people have much actual physical currency on hand and are woefully exposed to the risk of bank runs. "Normalcy bias" is certainly not a preference for physical cash, but rather the complete disdain for it. Why anybody would wish to lend large amounts of money to present day banks in the form of savings deposits or CDs is beyond me. The potential coming bank "bail-ins", a la Cyprus, will leave many depositors with smaller accounts and more limited/restricted access to them.