Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Cash Holdings of Apple and Other Tech High Fliers Are A Massive Risk in This Debt Jubilee Era

Interest-Rates / Credit Crisis 2016 May 26, 2016 - 06:53 PM GMT

By: Jeff_Berwick

Interest-Rates

Throw every “norm” out the window.  This Keynesian, central banking world has everything so distorted that nothing makes sense anymore.

There are currently more than $7 trillion in bonds, worldwide, offering a negative interest rate. Wrap your head around that!  People are actually paying trillions of dollars to give their money to mostly bankrupt governments with the promise they will receive less at a later date.


Treasury Bonds used to be described as having a “risk-free return.”  Now they are “return-free risk”.

This system is so backwards, inside-out, manipulated and bankrupt that what once used to be seen as “prudent and sound” is very obviously risky.

For example, Moody’s reported last Friday that Apple, Microsoft, Alphabet (Google), Cisco Systems and Oracle are sitting on $504 billion in cash and “cash equivalents.”

Moody’s Investor “Services” (and we put “Services” in the proverbial air quotes, because these are the same people who called bundles of mortgages loaned to dead and jobless people Triple-A) made this statement in their Friday report: “Corporate America’s rising pile of cash is becoming increasingly important to investors as profit growth and the stock market stalls.”

They are right that profit-growth is slowing.  The economy is stalling as we rest on the precipice of complete collapse.

In more normal times it would be prudent for companies to hold a large amount of cash to get through an economic downturn.  Not now!

Holding large amounts of cash – or even worse, cash “equivalents” (basically bankrupt government bonds paying a negative interest rate) is now increasingly unwise.

Consider currency risk.  A company like Apple, with subsidiaries worldwide, likely holds numerous currencies including euros and Japanese yen.

The Eurozone, as admitted by almost everyone, is on the verge of collapse.  And Japan too.

Both the euro and the yen may not even exist a few years from now.  And, even if they do, they’ll likely be so hyperinflated as to be on their way to becoming worthless.

The US dollar is in no better shape.  Countries around the world are moving away from using the dollar and the petrodollar system itself is failing.  The dollar could be quickly headed towards the dustbin of history.

And, Apple, meanwhile, has $215 billion in cash.  Much more  is actually in held in the debt of bankrupt governments (which is even worse)!

Apple’s market cap is currently about $500 billion. Nearly half of that is held in pieces of paper that could be valued at zero in just the next few years.

This, in fact, should be an investors biggest concern. You have nearly half the market cap of Apple being held in highly risky instruments. And then there is the  bonus risk of having 30% more being absconded by the Internal Rape Service (IRS) if Apple were to even repatriate that money to the US based parent company.

In other words, these large cash holdings are a major risk… and most people don’t even realize it.

If companies like Apple had any sense, they’d be diversifying out of fiat currencies into metals.  But, they are not… mostly because the CFOs of these companies went to Keynesian business schools. They watch CNBC, and think that the Federal Reserve is here to “help”.

And, to be fair, even if they did understand, most other people also have no idea what is going on. Apple and the others would likely receive a backlash from investors for “risking” their assets in barbarous relics like gold if they tried to make the transition.

Of course, when the hour comes, the entire economic fabric of Western civilization is going  to be ripped asunder. (We’ve documented that with our videos and White Papers. You can see our latest video HERE.) That’s the plan. That’s the intention of those at the very top of the economic structure. But try telling that to the average investor.

Gold rallied against the dollar by nearly 30 percent in the first four months of this year. And that would have provided quite a boost to Apple’s bottom line if the company had “cash” holdings in the yellow metal. It should have, but it didn’t.

Gold and silver are now the assets of choice for those who are awake to what is happening as we move further into Jubilee Year 2016. Billionaires like George Soros, Stanley Druckenmiller and Carl Icahn have all taken considerable positions in gold of late. We’ve reported on these moves and we understand exactly why they’ve taken place.

In fact, we’ve been ahead of the curve and sold (temporarily) quite a few of our positions just as Soros and others were buying.  TDV’s Senior Analyst, Ed Bugos, told subscribers to sell many of their positions just prior to the recent pullback in gold after making huge gains in the first quarter of this year.  He’ll be letting subscribers know when the best time is to get back in to even further profits.

I would suggest you subscribe to our TDV newsletter HERE so that you can get a sense of how to approach this type of defensive investing. The Fed has indicated rates might rise in June and that has strengthened the dollar against gold. But the stock market rally is seven years old. Sovereign, corporate and personal debt are scaling heights not seen since 2008.  And there are so many black swans out there that it is impossible to tell which ones will come home to roost.

Even the US government is beginning to prepare for calamity. Only a few days ago, Congress introduced the “No Bailouts for State, Territory, and Local Governments Act.” The new bill prohibits any federal agency from funding ANY bankrupt city, state, or territory. The bill also prohibits the Federal Reserve from “financially assisting State and Local governments.”

Congress is well aware of a massive wave of defaults about to hit cities and states. Puerto Rico is just the beginning.  We can see from this new bill that the federal government wants to make sure that every dime available ends up in its pockets. Nothing for cities or states.  But the US federal government is just as bankrupt as they are.

This coming collapse will be one for the history books and very few see it coming and even less know how to prepare.

Those invested with Apple and other large corporations may think they have insulated themselves from the worst of the volatility because of their large cash holdings. In fact, in a way, Apple is now mostly a money market fund and they may have just risked billions on a failing system.

Anarcho-Capitalist.  Libertarian.  Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks.  Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast.  Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media.

© 2016 Copyright Jeff Berwick - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Jeff Berwick Archive

© 2005-2019 http://www.MarketOracle.co.uk - 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