Duke University surveys 937 Chief Financial Officers. The relevant highlights:

“Cash exists in two locations: bank reserves and balance sheets of healthy companies,” Harvey said. “Banks show no sign of unfreezing credit. They are lending to the government, not to businesses. However, U.S. firms are sitting on over $1.8 trillion in cash. When will it be unleashed?”

The survey results show 50 percent of respondents have no intention of deploying their cash over the next 12 months. More than half of responders say they will continue to sit on cash for liquidity to protect against another round of credit tightening and general economic uncertainty. Of the 50 percent that will deploy cash, only 56 percent will allocate to capital spending and investment.

“We were especially interested in the type of capital spending that creates jobs,” Harvey said. “The survey shows only 22 percent of firms say their new capital spending will lead to hiring. This bodes very poorly for employment in 2011.”

Its tempting to think big problems must have big complicated causes. Yet, there is a simple story that explains our economic woes: a dramatic increase in liquidity demand which the Fed still refuses to address.

So far, the data seem to support that simple story.

The 4% Club is still accepting nominations.