People might sit on cash for one or more of several reasons: they have no confidence that they can earn a higher rate of return by investing, they believe deflation—or falling prices—is on the horizon (cash will increase in value relative to fixed assets), or deflation already exists. All three reasons are highly correlated, and under such circumstances, household and investor beliefs become a reality. Moreover, people may want to borrow, but find that banks and other lenders are reluctant to extend credit at such low interest rates, except to the most qualified borrowers.