“Never before in the history
“Never before in the history of the world has so much cash been hoarded in so many places by so many large organizations…Canadian companies have piled up more than $525 billion in cash reserves – almost a third the size of the entire economy – up from little more than $150 billion a decade earlier. According to a recent analysis by the Gandalf Group, at least 45 per cent of Canada’s biggest companies are hoarding cash rather than investing… In America the Federal Reserve estimates that a staggering $5.1 trillion – an amount larger than the economy of Germany – is piling up in American corporate cash holdings…In Britain, companies have accumulated almost $1.2 trillion in cash and deposits, equivalent to half the entire economy. And, no surprise, investment there grew by only 1.2 per cent last year……It’s strange, because this should be a great time for companies to invest: low prices, low interest rates, cheaper labour costs. A sensible company would build up cash during boom times – when investments are more expensive – and spend it during recessions, when consumer demand is weak and capital is cheap. Yet this is the precise opposite of what actually happens. Companies look at the low consumer demand and become terrified”http://www.theglobeandmail.com/commentary/tear-down-those-mountains-of-cash/article4431702/