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Loss of Confidence: Currency Hoarding and the Crash in Homeowner Equity
Confounded Interest ^ | 12/23/2012 | Anthony B. Sanders

Posted on 12/23/2012 9:19:58 AM PST by whitedog57

As we rapidly approach Christmas and the Holiday Season, it will be interesting to see what happens to checking account and credit card balances after it is over.

It is interesting to note the surge in demand deposits at commercial banks since the end of 2008.

A similar measure, Total Checkable Deposits (TCDSL), has also surged.

Between anemic GDP growth and the rapid growth in bank deposits (at incredibly low deposit rates), it is no wonder that M2 Money Velocity is dead.

Of course, the crash of the housing market and the loss of consumer confidence in the economy may explain the hording of currency at commercial banks.

While it is true that house prices are beginning to rise again in many parts of the country (in large part due to The Fed’s generous monetary stimulus), there seems to be a mentality of hoarding among consumers. Note that consumer confidence remains low after the housing market crash.

Let’s see if Dodd-Frank regulations and Obamacare taxes and healthcare rationing improve America’s mood after January 1st.

(Excerpt) Read more at confoundedinterest.wordpress.com ...


TOPICS: Business/Economy; Government; Politics
KEYWORDS: currency; deposits; housing; uscrisis
This is starting to get serious, folks!
1 posted on 12/23/2012 9:20:07 AM PST by whitedog57
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To: whitedog57
(Excerpt) Read more at confoundedinterest.wordpress.com ...

Why excerpt?

2 posted on 12/23/2012 9:24:02 AM PST by humblegunner
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To: whitedog57
Of course, the crash of the housing market and the loss of consumer confidence in the economy may explain the hording of currency at commercial banks.

So in the Age of Obama, saving money in your bank account instead of pissing it away on Escalades, Nike Air Jordans and bling is "hoarding currency."

3 posted on 12/23/2012 9:28:23 AM PST by E. Pluribus Unum ("Democracy is indispensable to socialism. The goal of socialism is communism." --Vladimir Lenin)
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To: whitedog57

Now expand this same “hoarding” scenario to thousands and thousands of businesses, which have no more reason to trust this administration than individuals, and you have a cash-rich economy that is absolutely stalled. This isn’t a question of money or money supply (though Ben Bernanke hasn’t gotten that through his head yet). It’s entirely a matter of nobody trusting the idiots in charge. It’s an entire nation’s business “going Galt.”


4 posted on 12/23/2012 9:31:31 AM PST by IronJack (=)
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To: whitedog57
Corporations have been hoarding for >10years

Households have been deleveraging rapidly
TCMDO = Total Credit Market Debt Owed

And M2 velocity is rapidly decreasing


5 posted on 12/23/2012 9:47:06 AM PST by HangnJudge
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To: IronJack

Expand it even further. I am a business person. I will not invest in such a climate. Risk of destruction is too high in the instability he has injected. The amount of eroded capital his policies have injected is unprecedented.

In the meanwhile, we all pay more at the supermarket for this very reason. Its built into the prices. Now add a handful of monetary expansion through debt.......

Worst part? its is all intentional by the marxist in chief. Actually, dually, marxist -muslim.... wanting to bring America down.


6 posted on 12/23/2012 9:47:32 AM PST by himno hero (hadnuff)
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To: whitedog57

before a crisis there is nothing to “hoard”. It’s called stockpiling, building inventory, pre-planning, disaster planning, or being a good boy scout. even the bible says the wise man looks at what is going on around him, and to plan accordingly. besides govt does it all the time.


7 posted on 12/23/2012 9:50:14 AM PST by Secret Agent Man (I can neither confirm or deny that; even if I could, I couldn't - it's classified.)
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To: whitedog57
"This is starting to get serious, folks! "

Celente thinks so:

GERALD CELENTE: The Financial Collapse Of 2013 Will Be Worse Than The Great Depression

8 posted on 12/23/2012 9:52:19 AM PST by blam
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To: E. Pluribus Unum
So in the Age of Obama, saving money in your bank account instead of pissing it away on Escalades, Nike Air Jordans and bling is "hoarding currency."

Money IS now being hoarding regardless of how poorly credit was over extended in the past.

9 posted on 12/23/2012 9:52:24 AM PST by FreeReign
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To: FreeReign
Could you repeat that in the Queen's English, please?

Seems a bit garbled.

10 posted on 12/23/2012 9:59:19 AM PST by E. Pluribus Unum ("Democracy is indispensable to socialism. The goal of socialism is communism." --Vladimir Lenin)
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To: whitedog57

After our close call in 2008, we have upped our savings/checking balances in a good rated bank to handle 3 months of no deposits from Iras, pensions and SS checks.

Around Memorial day I sent an email out to friends and relatives to have cash beween $500-$1000 cash on hand due to the PIGGS situation.

Some laughed, some thanked me and a few said that their financial advisors recommend much more cash on hand in 20’s not large bills. One family that laughed, 3 brothers, my age, their wives and their adult children were on a cruise to Greece and Italy during this past summer. When they got back to the states, they thanked me for the advise and followed it. What they saw in their motherlands scared the hell out of them.

In the past couple of years, we have seen several friends in their 60-70’s sell their California businesses and move out of state to retire, consult or start new businesses.

One of my longest time wise friend lives in a totally red state and city that voted aqainst Obozo and has red congressits. He has owned and run a good business since the 1960’s, if his state forces Obozo care on him and other owners, they will sell out or just close their doors. Like other guys/gals who own businesses, the Obozo lovers/supporters working for him will be the first to go.


11 posted on 12/23/2012 10:23:47 AM PST by Grampa Dave (Tagline space for rent to pay for some of my extra taxes the next 4 years!)
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To: humblegunner

I excerpted the charts, not the text.

While it may be argued that deleveraging and saving is normal after a bubble burst/recession, it is long after the recession allegedly ended.


12 posted on 12/23/2012 11:12:19 AM PST by whitedog57
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To: humblegunner

Why anal picking?


13 posted on 12/23/2012 11:18:51 AM PST by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: Grampa Dave

>> “ Like other guys/gals who own businesses, the Obozo lovers/supporters working for him will be the first to go.” <<

.
Already happened for me! - If they believe in Obama, let him take care of them; I have far better things to do with my business than support the enemy.


14 posted on 12/23/2012 11:36:03 AM PST by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: E. Pluribus Unum
I'll tell you what.

Try your post again minus the logical fallacy, and then I'll try mine.

Okay? Thanks.

15 posted on 12/23/2012 11:58:35 AM PST by FreeReign
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To: editor-surveyor

“Already happened for me! - If they believe in Obama, let him take care of them; I have far better things to do with my business than support the enemy.”

Good for you.

We don’t own businesses, but we avoid any business, city or state that supported Obama.

That is our way of going Galt.

The day that a large % of conservatives start this, we will have an economic hammer that will out weigh the left wing mediots re impact.


16 posted on 12/23/2012 12:02:38 PM PST by Grampa Dave (Tagline space for rent to pay for some of my extra taxes the next 4 years!)
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To: editor-surveyor
Why anal picking?

Maybe you mis-applied your Vagisil and it caused an irritation.

17 posted on 12/23/2012 12:02:56 PM PST by humblegunner
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To: humblegunner

It produced a phenominon known as “humblegunner.”

All anal, all the time.


18 posted on 12/23/2012 12:09:22 PM PST by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: editor-surveyor

Next time read the directions.


19 posted on 12/23/2012 12:15:31 PM PST by humblegunner
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To: FreeReign
saving money in your bank account ... is "hoarding currency."

Once upon a time, hoarding cash or gold meant keeping it under your mattress or in a vault (and not the bank's vault), and the term hoarding also implied storing way more than you would ever use. Today, having it in a bank account where it is used to fund loans is considered hoarding, which is pretty ridiculous.

Money isn't being hoarded in the old style, it's just been moved to low risk positions. One of the reasons to do so is that it is available to meet expenses when income falls, which is a pretty high risk for a lot of folks these days.

Don't let the left control the language, what intelligent folks are doing now is NOT hoarding.

Well, I'd like to have a hoard of gold, but that much gold is not in the budget, and my name is not Smaug.

20 posted on 12/23/2012 12:33:10 PM PST by slowhandluke (It's hard to be cynical enough in this age.)
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To: FreeReign
"Logical fallacy?"

Sounds like I hit a bullseye, and you don't like it.

21 posted on 12/23/2012 1:05:49 PM PST by E. Pluribus Unum ("Democracy is indispensable to socialism. The goal of socialism is communism." --Vladimir Lenin)
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To: slowhandluke
More money is being put into cash accounts (and gold). Less money is being invested in stocks, businesses...etc.

People are afraid to invest.

Call it what you want.

22 posted on 12/23/2012 1:09:48 PM PST by FreeReign
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To: E. Pluribus Unum

LOL!

Your logical fallacies keep coming.


23 posted on 12/23/2012 1:13:34 PM PST by FreeReign
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To: FreeReign

They seem to be your middle name.


24 posted on 12/23/2012 2:30:15 PM PST by E. Pluribus Unum ("Democracy is indispensable to socialism. The goal of socialism is communism." --Vladimir Lenin)
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To: FreeReign
More money is being put into cash accounts (and gold). Less money is being invested in stocks, businesses...etc. People are afraid to invest.

Call it what you want.

I'd call it theft by government. It's perfectly understandable to keep a higher cash balance, but it's futile. The dollar is melting under our proverbial feet. Some of your cash balance should be gold.

Yes, it'll go up and then it'll go down. But it's a much better place to park some cash than dollars in the local bank.

25 posted on 12/23/2012 4:30:02 PM PST by BfloGuy (Workers and consumers are, of course, identical.)
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