Companies May Finally Be Starting to Spend That Cash

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It’s one of the many ironies of the last few years: The Federal Reserve lowered interest rates in order to (among other things) compel businesses to spend their cash rather than save it. And yet, the pile of corporate cash has grown astronomically in the face of interest rates kept near zero. According to Moody’s, U.S. corporations were sitting on $1.24 trillion of cash at the end of 2011. That’s more than 8 percent of the entire U.S. economy.

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