NaturalNews) 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.”
–People fled stocks: “A desire for safety drove people to dump stocks, even as prices rocketed from crisis lows in early 2009, and put their money into bonds,” the AP reported. In the five years following the crisis, investors from the top 10 countries pulled $1.1 trillion from stock mutual funds.
–The great cash hoard has begun: “Looking for safety for their money, households in the six biggest developed economies added $3.3 trillion, or 15 percent, to their cash holdings in the five years after the crisis,” the AP reported. That’s slightly more than in the previous five years, per the Organization for Economic Cooperation and Development.
–Getting rid of, and avoiding new, debt: In the five years before the financial crisis, average household debt grew at an unprecedented rate. In the U.S., the United Kingdom and France, debt rocketed more than 50 percent per adult; for all 10 countries, it rose 34 percent. Since then, debt per adult in the 10 countries has declined 1 percent, which economists say has not happened since 1946.
–Cutting spending: In order to cut debt and save more, spending has been sacrificed. “Adjusting for inflation, global consumer spending rose 1.6 percent a year during the five years after the crisis, according to PricewaterhouseCoopers, an accounting and consulting firm. That was about half the growth rate before the crisis and only slightly more than the annual growth in population during those years,” the AP reported. Sources: