13 June 2012

Cash and trade cycles

I'm a strong believer in trade cycles - what goes down must come up.  This article in Financial Management draws attention to the fact that increasing numbers of companies are sitting on piles of cash (well liquid assets on the overnight market anyway) and as soon as they have the confidence to spend it, the economy will be in for a steep take-off.

The big question is: when will that be?  The answer, especially with changes to the fundamentals like Euro problems, is not clear.  Economics works better with hindsight.

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