Thursday, October 17, 2013

Families around the world are pulling cash out of banks and hiding it in their homes...

The financial crash and Great Recession of 2008-09, which was felt far beyond U.S. borders, so spooked families around the globe that increasingly many have begun hoarding cash in their homes rather than trust it to banks.

According to a recent report by The Associated Press, "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 AP analysis of homes in the 10 largest economies found that families are still spending very cautiously. In addition, they have pulled hundreds of billions of dollars out of stocks and have trimmed borrowing for the first time in decades while stuffing money into savings and bonds, despite the fact that they offer miniscule interest rates that often don't match inflation.

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

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