Not really, they'd rather buy treasuries and deposit at the FED for a risk-free 4-5% return and it shows in FRED data; roughly $2.5 Trillion dollars are currently held at just Fed's overnight repo facility. In return when banks do want to lend it out, poor people (often with bad or average credit) get ludicrous interest rates like 15-25%.
If neutral rates were higher then people with cash who want to invest would be more incentivized to buy a bond instead of a stock. But because the rate is higher the issuing company has to make at least that percentage to break even let alone make a profit. So they will need to make more widgets, which means they have to hire more people.
The down side of course is that rates are so high that companies can’t make enough money to pay back debt holders so they default and fail and have to fire everyone.
70% of the money supply in Germany is literally sitting in checking accounts. If people actually saved money by lending it via certificate of deposits according to classical economics then this number would be much lower.
>They don't have Scrooge McDuck cash vaults, either. Their money "store" is all invested.
The parent said cash hoarder to cash hoarder and that is true when you buy stocks or art and neither consume the newly obtained money nor lend it out.
>Even if the money is deposited in a bank, it doesn't stay in the bank. The bank loans it out. That's how banks make money. You deposit money, they loan it out to someone who pays them interest.
As I said above, the money isn't lent out, new money is created with loans and the money that is being created is also kept in checking accounts so nobody is bringing their money to the bank in the way you imply. Money in checking accounts is essentially dead money. It is like the money in Scrooge McDuck's vault.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
> companies started building huge money stores.
They don't have Scrooge McDuck cash vaults, either. Their money "store" is all invested.
> You may as well hold on to it.
Even if the money is deposited in a bank, it doesn't stay in the bank. The bank loans it out. That's how banks make money. You deposit money, they loan it out to someone who pays them interest.