Currency Demand

Actually, somewhat to my surprise in light of all the financial turmoil, we are not seeing a large spike in currency holdings. (Click here to see the data.) There was a large spike at the end of 1999, when many people feared that banks might be paralyzed by the Y2K problem, but nothing like that more recently.

Update: A reader alerts me to this news story from the U.K.: "Sales of household safes have surged as wealthy savers concerned about the health of banks opt to keep cash at home. "