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In the Money

June 15, 2024 | Posted in: Wealth Strategies

Many Americans have a gloomy view of the economy despite overwhelming evidence that it is quite strong. Unemployment is close to a record low, stocks are trading near all-time highs, inflation has moderated, and disposable income is about 6% higher than pre-Covid levels even after adjusting for the inflation we experienced in 2022 and 2023. Well, here is another interesting tidbit. This graph shows the amount of assets held in money market funds and you will note that it has surged almost 30% since the middle of 2022. If Americans are faring so poorly, how is it that they are sitting on $6.4 trillion in cash? One other point of reference is that the capitalization of the U.S. stock market is about $54 trillion suggesting that available cash represents almost 12% of its value.