Bank deposits hit record high of nearly $10 trillion
Bank deposits hit record high of nearly $10 trillion – Aug. 25, 2011.
Deposits in FDIC-insured banks climbed $343 billion in the first half of the year to an all-time high of $9.8 trillion, according to Market Rates Insight, which tracks bank pricing.
Funds stored in CDs, which holders don’t have access to until a specific date, fell $94 billion to $1.9 trillion in the six months ended June. Meanwhile, balances of liquid accounts, like money markets and savings accounts, jumped by $446 billion to $6.3 trillion.
NeilS – I suppose this isn’t completely unexpected under the current circumstances. Fear and uncertainty are running rampant through our political and economic systems, and clearly the general public is acutely aware of this. As people’s faith in the economic and political system wanes, they are shifting their portfolios into the most liquid assets they can find.
Of course, investment options for the lay person are severely limited. CDs and government bonds yield next to nothing, gold is looking “bubblesque” (10% drop in the last 2 days), and you better be prepared for some nauseating swings if you are to plunk your money into the stock market. It appears that people feel like it’s safer to go into “money hibernation” until they can see the light at the end of the tunnel.