Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

The Solution to Ultra-Low Interest Rates

Companies / Investing 2015 May 24, 2015 - 09:04 PM GMT

By: Investment_U


Andrew Snyder writes: The addiction continues...

The latest word from the Fed tells us there’s no rate hike in sight. Welcome to a world without interest rates.

The Fed’s inability to wean us off its stimulus has me pondering an even bigger idea... Why is something as dangerous as debt such a coveted and vital tool within our economy?

I mean, why is it Uncle Sam finds it wise to let us deduct our interest expense, but then taxes our dividends twice?

We’re rewarded for borrowing what we don’t have... and penalized for finding success. It doesn’t make sense... (Unless, of course, you’re trying to manipulate a force as powerful as the free markets.)

Don’t worry, though. I’ve got a solution.

We often talk about liberty through wealth. But what about liberating wealth? I’ll explain...

You may not have heard the news (after all, it’s not something our leaders are particularly eager to boast about), but the amount of cash held overseas by American firms is now estimated at an incredible $2.1 trillion.

That means 64 cents out of every dollar in corporate cash... is stashed somewhere outside our borders.

I’m absolutely convinced that if we liberate that wealth - that is, bring it home to the States - it would be far more beneficial to our economy’s long-term health than keeping interest rates artificially and dangerously low.

The problem is all that money is not going to be brought home anytime soon. After all, Uncle Sam wants nothing more than to pull his “fair” share from the stockpile.

He wants to tax all those profits... at a rate of 35%.

For proof of just how deadly that ultra-high tax rate is, all we need to do is turn to tech giant Cisco (Nasdaq: CSCO). It’s sitting on some $50 billion worth of foreign cash reserves. But instead of bringing it home and handing over a third of it to Washington, it’s using the cash to expand in India, France and Israel... flat-out admitting it would be hiring in the States if it weren’t for America’s high corporate taxes.

“I’d prefer to have the vast majority of my employees here,” the company’s CEO John Chambers said when pressed on the idea. “And our tax policy is causing me to make decisions that I don’t think is in the interest of our country, or even in our shareholders, long term.”

Just about the only industry interested in repatriating its offshore reserves is the cash-starved energy sector. And it’s paying the price.

Duke Energy (NYSE: DUK) recently tapped part of its $2.7 billion worth of foreign profits. But before it did, it had to cut a check worth $373 million to Uncle Sam.

Again, with a 35% tax rate waiting to pillage foreign profits, there’s no incentive to bring money home and boost the American economy in a real and sustainable way.

In fact, it’s just the opposite. Instead of tapping their reserves, cash-fat companies like Apple (Nasdaq: AAPL) are borrowing money. As we mentioned last week, the company has tapped the bond market for tens of billions of dollars over the last two years. It’s all thanks to artificially low interest rates.

The bottom line here is quite clear.

If we want to boost the American economy and do it in a way that doesn’t get us addicted to dangerous, half-cocked monetary policy, we must let that foreign cash come home.

Slashing the corporate tax burden is the answer. It’s the smart solution.

Instead of hoping and praying low interest rates (and therefore... more debt) will keep our economy alive, Washington must cut the rate that really matters - our foreign tax rate.

We’d instantly liberate 2 trillion bucks of real money... that was earned, not printed and loaned to the lowest bidder.

Then again, that makes too much sense.

Good investing,



Copyright © 1999 - 2015 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email:

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules