4 ms·

> more imports fuel ever more demand for apparently good investments. This is part of the demand side of the "global savings glut" (it doesn't mean actual cash)

• skybrian 7y ago
  "Cash" is often used broadly to mean any low-risk, stable investment that could easily be exchanged for cash. So for example a reporter might write that Google has "over $100 billion in cash", but if you look at the balance sheet, "total cash" includes both "cash and cash equivalents" and "short term investments." These investments might include short-term government and corporate bonds.
  • vladimirralev 7y ago
    Sure but then the savings reference breaks down. Bonds and corporate bonds in particular shouldn't be considered "savings" because the money is being circulated. I am sure everybody has a different definition but in the "global savings glut" phenomenon those savings shouldn't include bonds?
    • skybrian 7y ago
      Yes, this is a matter of definitions, but it looks like the people writing about "global savings glut" are including short-term corporate bonds. But the reason there is a choice of definitions is because all lending creates money if the debt is considered reliable and can circulate like money. It's quite similar to the reasons that bank deposits are considered money. You can use a stricter definition that doesn't include bonds but I'm not sure why you prefer it?