Wednesday, March 14, 2012

Apple Pops on Misleading Headline

When I looked for an explanation this morning why Apple should be up $9 so early in the day, the only relevant news I saw said: Apple's cash stash leads U.S. record $1.24 trillion. Apple's been accused of hoarding cash, but this number is larger than it's whole market cap (for now). Now maybe the pop is based on yesterday's news that Apple's new iPad will govern NAND Flash pricing through 2015, or the rumor about my pending new Apple article at Seeking Alpha. Sure, that's it.

But back to the crazy Apple $1.24 trillion cash headline.

The original story from Moody's was US Corporate Cash Pile At $1.24 Trillion, Over Half Located Overseas. That's right: the entire worldwide cash supply of all U.S. companies stands just under a trillion and a quarter bucks. At least, at the equivalent thereof; more than half is outside the US and much of that is in local currencies. Meanwhile, Congress has outspent its means so much for so long that the United States now owes over ten times that amount – in fact, about twelve and a half times that amount – in a national debt exceeding $15.5 trillion dollars.

Okay, so about $4.75 trillion is owed to other government agencies like the one that holds Medicare trust funds or the one that safeguards Social Security retirement funds. But so what? If we expect a fund to be maintained for members of the public entitled to benefits, we should account for them like any other debt and add it in. Even without the $4.75 trillion owed to other governmental bodies, Congress has run up a 14-digit national debt.

If the best that can be saved for use is thirteen figures across the entire panoply of American businesses' global operations, how is it that we can permit Congress to spend fourteen digits?

It's not like we're making an investment in a war that will secure productive oil fields on other continents or ensure we don't run out of cheap foreign labor. We had the oil fields and labor as easily as by opening our checkbooks and always have. What are we allowing Congress to do in our names?

There's a good question to ask regarding the future value of U.S. currency and how that value compares to that of our largest trading partner. There's another article needed on that, of course, but the contrast between the most we can save and what we permit Congress to spend is simply shocking.

No comments: