my mic is jacked... had to speak into the headset. Video Rating: 5 / 5 Almost half (44pc) of the 1,000 CFOs surveyed by the global business consultancy reported that the crisis had affected their expansion plans, with 16pc reporting a "large impact". Only Iran and Iraq were considered more risky than Greece, while Spain ... [wprebay kw="business+/+investing" num="0" ebcat="-1"] "I keep hearing that, due to concerns over the future, that businesses, banks, etc. aren't investing, and that this is keeping us in a recession. So where is their money? Is it just locked up in a vault somewhere? The best answer I can think of is that banks are keeping a higher deposited to loaned ratio. Is this right? But this seems odd...If the ratio is higher than it "should be", then it would seem some loans worth investing in aren't being captured. Smart banks would naturally seek out these loan opps, such that the optimal equilibrium would always be more or less reached. I honestly have no right vs. left opinion on this, but the only answer I can see is that our government is heavily tied into the situation, such that if the government is making poor decisions it has enough of an influence to drag down the equilibrium (as if it unfavorably weights the risk of every citizen in a recession). I suppose if companies were large enough they could do the same thing. Am I way off? What factors am I not considering? My take so far is the when people say businesses aren't investing (due to uncertainty etc.), it really means they are either 1. keeping their money in banks or 2. investing in other countries. For 1. My entire confusion rests in the fact that money in banks is still presumably gaining interest because the banks hold demand for those dollars, for whatever reason. This to me does sound like it is invested. It's invested in banks, who are using the money somehow. Now, somewhere down at the end for the money flow chain, I'm assuming there must be a chunk of $ sitting around not doing anything; gaining no interest, and perhaps that chunk is larger than normal. Alternatively, no such end of the line exists; the money is circulating constantly to provide loans etc, in which case the idea of money not being invested seems incorrect. For #2. This makes more sense to me, and if true then I'm surprised the issue of companies and banks not investing is not specified as "not " Author => kerriobrown Leave your comments below
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