Why People Are Hoarding Cash in the Coronavirus Panic

A funny thing happened on the way to the Fed.  To keep the COVID-19 economy rolling, the Federal Reserve pumped in trillions of dollars — mostly by buying securities to increase the lendable reserves of commercial banks.  The people behind all this didn't ignore us little folks, either: according to the most recent Fed data, they increased the amount of currency in circulation too.  That's money that folds folks — over 65 billion more dollars during the last sixty days alone.  Its way more than we need to bribe a few government officials, but where did the rest of it go?  It's not being spent. Credit and debit card use at retail stores — mostly grocers these days — is way up.  The popular story being bandied about is that cash carries the virus, so people are avoiding its use.  Okay, let's buy into that line for a minute and assume that folks would rather have rolls of...(Read Full Article)
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