It feels like cash is getting more valuable throughout the world. At least, this follows from a newly released report, made by BAML, Bank of America Merrill Lynch. The report states since the second half of 2015, cash has been being the most popular asset all over the world.
For that period, fixed-income funds faced up to $46 billion of outflows, and BAML says it’s mainly because of redemptions from the credit markets. Meanwhile, $208 billion merged into cash. Yes, when talking about “cash,” we firstly mean this hard, cold stuff or anything else, which can be easily converted into this. It normally includes money-market mutual funds as well as bank deposits, which carry interest. In other words, investors are withdrawing their funds from the markets and siting this out. Currently investors are selling inflation just to buy deflation.
The week that ended January 27 faced enormous outflows from Treasury Inflation-Protected Securities, originally supposed to ensure protection from inflation. BAML also pointed out to the 13th tough week of massive outflows from bank loan funds, to say nothing of the seventh week of outflows from financials. That’s an obvious sign of poor confidence in the world economy.