Recent earnings reports from the private sector are showing a disturbing new trend - companies are holding onto their cash. Many people believe this is a good thing since companies are now able to pay off their debts and distribute more wealth to shareholders. Unfortunately, the goal of the Fed cuts (at the expense of the US dollar) was to give companies more cash to pay employees in order to boost wages and jumpstart consumer spending. The fact that companies are stockpiling this cash does not bode well with consumers who now face stagnant wages, rising prices, and a declining US dollar. In fact, it appears as if the Fed's strategy is backfiring... again.

From the New York Times:
Unlike most American consumers, whose failure to save has exasperated economists for years, the typical American corporation has increased its savings so sharply that it probably has enough cash on hand to completely pay off its debts. That should be good news in an economy unsettled by rising energy prices, tightening credit, gyrating stock prices and declining values for the dollar and the family homestead. Indeed, the Federal Reserve chairman, Ben S. Bernanke, cited strong corporate balance sheets as a bright spot in the darkening forecast he presented to Congress last week.