Ash4781 Posted August 17, 2010 Share Posted August 17, 2010 (edited) In the Mail on Sunday there was an article that referred to a boe bod speech where it was suggested that companies were hoarding cash. Presumably also low demand for borrowing / reducing debts. Though if the extra cash reaches too far down the supply chain (as wage increases) Boe will raise rates ? In addition another annoyance was exporters using the weaker exchange rate to expand margins. At these low to negative real returns are companies really hoarding cash? (edit and raising prices) Edited August 17, 2010 by Ash4781 Quote Link to comment Share on other sites More sharing options...
mikthe20 Posted August 17, 2010 Share Posted August 17, 2010 (edited) Unbelievable isn't it. Businesses and individuals that don't save for a rainy day get bailed out by the taxpayer, those that do are berated for "hoarding cash", as if it wasn't theirs to do what they wish with or keep it in case of emergencies, or use it to buy cheap assets from poor-performing competitors when they go bust. They really want everyone down to the lowest common denominator - ie. punish success, in debt and dependent on the state. Why the Government hasn't taken a knife to the board of the BoE God only knows. Edited August 17, 2010 by mikthe20 Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted August 17, 2010 Share Posted August 17, 2010 I always hoarded cash when I was in business..... and I still do now that I'm retired . Awaiting a loud knock on the door . Quote Link to comment Share on other sites More sharing options...
ken_ichikawa Posted August 17, 2010 Share Posted August 17, 2010 I always hoarded cash when I was in business..... and I still do now that I'm retired . Awaiting a loud knock on the door . Why when firing up the printers is so much more efficient at this. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted August 17, 2010 Share Posted August 17, 2010 Why when firing up the printers is so much more efficient at this. Eh? Quote Link to comment Share on other sites More sharing options...
ken_ichikawa Posted August 17, 2010 Share Posted August 17, 2010 Eh? If you hoard cash, having to come round house by house with guns is incredibly inefficient. When they can do exactly the same thing, steal the value of your hoarded cash by printing more cash and diluting the cash in circulation therefore mugging you without needing to put their hands in your pocket. They may come round if you have gold or silver though. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted August 17, 2010 Share Posted August 17, 2010 If you hoard cash, having to come round house by house with guns is incredibly inefficient. When they can do exactly the same thing, steal the value of your hoarded cash by printing more cash and diluting the cash in circulation therefore mugging you without needing to put their hands in your pocket. They may come round if you have gold or silver though. Ah, a gold bug, now I understand . Quote Link to comment Share on other sites More sharing options...
SNACR Posted August 17, 2010 Share Posted August 17, 2010 They may have mistaken that a lack of business spending equates to hoarding cash. Of the most recent administrator sales of insolvent supplier's inventory the bids have been very low or non-existent. These were opportunities that were at a level of value that if there was significant free cash available it would have winkled it out. Quote Link to comment Share on other sites More sharing options...
xux42 Posted August 17, 2010 Share Posted August 17, 2010 At these low to negative real returns are companies really hoarding cash? (edit and raising prices) Dunno how rare it is but the SME I work for (temporarily!) is hoarding several years turnover. They plan to screw a desperate commercial property co. and 'steal' brand new high spec. offices which they will then own outright. They then intend to nail an equally desperate co. to manage & maintain the property for peanuts. Their approach of not leaving anything for the other guy worries me a bit - they are building a rep. as a firm to avoid doing business with IMHO. Apparently they are unable to afford payrises from this warchest Quote Link to comment Share on other sites More sharing options...
A_Landlord Posted August 17, 2010 Share Posted August 17, 2010 I am or my company is as well. I have not been taking a salary or dividends and I'm planning to wrap up my company when this contract comes to an end. Looking forward to paying the 10% Entrepreneurs' Relief on the money. I wonder how many other companies are planning this as well - the majority of 1 man band contractors I work with are planning this too. Quote Link to comment Share on other sites More sharing options...
SNACR Posted August 17, 2010 Share Posted August 17, 2010 I am or my company is as well. I have not been taking a salary or dividends and I'm planning to wrap up my company when this contract comes to an end. Looking forward to paying the 10% Entrepreneurs' Relief on the money. I wonder how many other companies are planning this as well - the majority of 1 man band contractors I work with are planning this too. I certainly get the impression a lot of SMEs are just treading water until leases expire or the two year time limit on transferring assets. Quote Link to comment Share on other sites More sharing options...
keef Posted August 17, 2010 Share Posted August 17, 2010 Unbelievable isn't it. Businesses and individuals that don't save for a rainy day get bailed out by the taxpayer, those that do are berated for "hoarding cash", as if it wasn't theirs to do what they wish with or keep it in case of emergencies, or use it to buy cheap assets from poor-performing competitors when they go bust. Exactly my reaction, mate - absolutely astonishing. "Hoarding cash"??? What a dildo. Quote Link to comment Share on other sites More sharing options...
scepticus Posted August 17, 2010 Share Posted August 17, 2010 are companies hoarding cash? YES. please see my HPC thread titled 'where has all our money gone' Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted August 17, 2010 Share Posted August 17, 2010 are companies hoarding cash? YES. please see my HPC thread titled 'where has all our money gone' Isn't it their money? Quote Link to comment Share on other sites More sharing options...
200p Posted August 17, 2010 Share Posted August 17, 2010 I'd say companies are usin cash in repaying debt. Company news pre-crunch was all about expansion and levering up to take market share. Now good news revolves around reducing chunks of debt by paying it off rather than refinancing where possible. Yes more money heading towards the banks, again! Quote Link to comment Share on other sites More sharing options...
mikthe20 Posted August 17, 2010 Share Posted August 17, 2010 I am or my company is as well. I have not been taking a salary or dividends and I'm planning to wrap up my company when this contract comes to an end. Looking forward to paying the 10% Entrepreneurs' Relief on the money. I wonder how many other companies are planning this as well - the majority of 1 man band contractors I work with are planning this too. Ooh, does entrepreneur's relief apply on winding up a company? Didn't know that - thought it was only on trade sale or share sales. Might alter my plans a little if so. Quote Link to comment Share on other sites More sharing options...
geezer466 Posted August 17, 2010 Share Posted August 17, 2010 I am a small business and have used the last couple of years to pay down all the debt. There is little more I can do to expand/invest into my business as (for now) it is more or less at its optimum earnings potential. Nuffink to spend it on so it lavishes in the Nat West awaiting my retirement growing healthily on the deposits (not the interest). I could for example go and buy a brand new BMW off the shelf but I won't as I find my 8 year old focus estate does the job wonderfully. I am always of the mind 'if it aint broke don't fix it'. Quote Link to comment Share on other sites More sharing options...
porca misèria Posted August 17, 2010 Share Posted August 17, 2010 I am or my company is as well. I have not been taking a salary or dividends and I'm planning to wrap up my company when this contract comes to an end. Looking forward to paying the 10% Entrepreneurs' Relief on the money. I wonder how many other companies are planning this as well - the majority of 1 man band contractors I work with are planning this too. Can you actually do that? I thought the 10% applied when you sold a business as a going concern, not wound it up. Would be great to be able to get money out of my company at 10%, but I'm not planning either to sell or wind up for the forseeable Quote Link to comment Share on other sites More sharing options...
bogbrush Posted August 17, 2010 Share Posted August 17, 2010 Unbelievable isn't it. Businesses and individuals that don't save for a rainy day get bailed out by the taxpayer, those that do are berated for "hoarding cash", as if it wasn't theirs to do what they wish with or keep it in case of emergencies, or use it to buy cheap assets from poor-performing competitors when they go bust. They really want everyone down to the lowest common denominator - ie. punish success, in debt and dependent on the state. Why the Government hasn't taken a knife to the board of the BoE God only knows. Thanks for that. I am sick of this said as if it's a crime. We have worked really hard to get beyond the point of needing external funding and now have a cash pile; why should that be blown on bad assets when we can use it to have reserves of energy to make moves when the time is right? It'll get spent, but not because someone tries to force us with negative rates or any of that bullsh1t. A bad investment is a really negative rate. Quote Link to comment Share on other sites More sharing options...
porca misèria Posted August 17, 2010 Share Posted August 17, 2010 Thanks for that. I am sick of this said as if it's a crime. We have worked really hard to get beyond the point of needing external funding and now have a cash pile; why should that be blown on bad assets when we can use it to have reserves of energy to make moves when the time is right? It'll get spent, but not because someone tries to force us with negative rates or any of that bullsh1t. A bad investment is a really negative rate. Is yours a private business? If there's a cash-pile beyond a rainy-day reserve, employees and shareholders might take an interest in what you plan to do with it. Quote Link to comment Share on other sites More sharing options...
bogbrush Posted August 17, 2010 Share Posted August 17, 2010 Is yours a private business? If there's a cash-pile beyond a rainy-day reserve, employees and shareholders might take an interest in what you plan to do with it. It's private. It 's not quite as simple as it sitting in the business account, but that's the gist of it. The purose is business flexibility or alternative use. Quote Link to comment Share on other sites More sharing options...
northwestsmith2 Posted August 17, 2010 Share Posted August 17, 2010 Just need two graphs, the ECB overnight deposits and the BOE. Quote Link to comment Share on other sites More sharing options...
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