Governments around the world have quietly escalated the war on cash
Source: Daily Crux
http://thecrux.com/governments-around-t ... r-on-cash/
Instead of bringing the cash back to the U.S. and paying Uncle Sam, Apple kept the money offshore and issued bonds domestically to pay dividends and buy back its stock.
The company owes the U.S. taxes on the interest it earns overseas, but it writes off the interest it pays on outstanding bonds.
There’s no question that companies like Apple, Microsoft, IBM, Alphabet, and others that hold large amounts of cash overseas have more foreign funds than domestic bonds outstanding.
But the point is that those funds aren’t as idle as they might appear. So, when they finally make it back stateside, chances are they won’t generate a flurry of new corporate investments.
While U.S. companies hold $2.1 trillion overseas, they also hold $1.92 trillion domestically.
Another testament to the low-growth story is what many companies actually do with their excess cash and bond proceeds – buy back their own stock.
When your best use of cash is to purchase your company shares on the open market, it must mean the corporate landscape is devoid of good investment opportunities.
Financial institutions hold $2.2 trillion in excess reserves at the Federal Reserve. These are funds that could be lent as new credit, if only they could find worthy borrowers and projects.
The average American over the age of 60 cuts spending 2.5 percent per year, or about 20 percent over a 10-year period
American households and nonprofits were worth $93 trillion at the end of last year, according the U.S. Federal Reserve. That’s almost $300,000 for every man, woman, and child in the country.
Historically. waiting for the market to fall has been an abysmal strategy, far worse than buying and holding in both absolute and risk-adjusted terms.”
Visa is now offering small merchants using its payment systems $10,000 each to help them upgrade those systems.
In exchange for this “gift”… they can no longer accept cash payments.
Private client cash levels have dropped to a record low as a percentage of total assets, according to data compiled by Bank of America Merrill Lynch (10.4% from 21% in Feb 2009)
Institutional investors are also holding the lowest levels of cash since the start of the eight-year bull market, survey data compiled by Citigroup show. The measure now sits at less than one-third of a multi-year high reached in 2016.
Active equity funds just absorbed their biggest inflows in 2 1/2 years, according to BAML.
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