Apple Owns $52.6 Billion In US Treasury Securities, More Than Mexico, Turkey or Norway (cnbc.com) 93
randomErr shares a report from CNBC: If Apple were a foreign country, CEO Tim Cook might have considerable political clout in the United States. That's because the tech giant owns $52.6 billion in U.S. Treasury securities, which would rank it among the top 25 major foreign holders, according to estimates from the Treasury Department and Apple's SEC filings released Wednesday. Apple's stake in U.S. government securities as of June, up from $41.7 billion as of last September, puts it ahead of Israel, Mexico and the Netherlands, according to Treasury data released last month, which tracks up to May of this year. With $20.1 billion in short-term Treasury securities and $31.35 billion in long-term marketable Treasury securities, Apple still falls far below countries like China and Japan, which hold over a trillion dollars in U.S. government debt each -- which has caused considerable hand-wringing in Washington. Still, Apple is way above other big companies like Amazon, which owns less than $5 billion in U.S. government or agency securities combined, according to regulatory filings.
Why is this a problem? (Score:5, Insightful)
Treasury bonds are an investment instrument. Everybody with a balanced portfolio of investments will have some of them as well as some diversified stocks, in different proportions relative to your investment strategy. Apple just has a fuckton of money, and of course has it invested so it's not losing value while they're not using it, so a significant fraction of that fuckton of money is going to be in treasury bonds.
That doesn't make the government beholden to Apple or anything. It's not like Apple can say "give me back the money you owe me now, or else". If anything it makes Apple more dependent on the Federal government, and its future ability to pay back its debts.
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Treasury bonds are an investment instrument.
Yup. Oh - how much does Apple pay in taxes again? Oh, yeah, that's right. The ship the money to Ireland to avoid US taxes.
So we get screwed twice. No money from taxes, then pay for them to invest here. A two-fer.
"Make money here - pay taxes here." Once corporations do that, then we can take a look at how much the taxes are.
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Yup. Oh - how much does Apple pay in taxes again?
100% of all legally owed taxes. And not a penny more. Probably much like you do as well... Unless you willingly forgo legal deductions and tax shelters?
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And the taxes we pay are paying for the interest payments on those bonds. It's a weird circle.
Re:Why is this a problem? (Score:4, Insightful)
And which companies/groups/blocks of people have intentionally bribed... I mean lobbied to have those deductions and tax shelters put in place?
Standard Oil, Ma Bell, U.S. Steel, DuPont, and their ilk. The computer world joined the big boys after the turn of the century. That scheme was setup long before Bill and Steve had their feud.
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100% of all legally owed taxes.
Not according to the EU.
Unless you willingly forgo legal deductions and tax shelters?
Yes. Now what?
Ah well, pointless to argue with people convinced "legal = moral". Just have to wait for the next version of the SS to take care of it.
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"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
Judge Learned Hand.
What is "moral" about paying more taxes than required? If morality is about paying taxes, then you must consider the rich the most moral of all, since they pay the highest tax rate and most of the tax money [taxfoundation.org]. And the bottom 50% of income earners must all be immoral cretins since they pay, essentially, nothing.
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Slavery is still legal and widespread in the US, so long as the government finds you guilty of a crime first: read the 13th Amendment, then look at the for-profit prison industry.
Re:Why is this a problem? (Score:4, Insightful)
Yup. Oh - how much does Apple pay in taxes again?
100% of all legally owed taxes. And not a penny more. Probably much like you do as well... Unless you willingly forgo legal deductions and tax shelters?
The average taxpayer doesn't abuse the shit out of offshore tax havens and maintain armies of lobbyists in order to reduce their tax liability from millions to pennies every year.
If they did, the government would have been broke long ago, so let's just drop the bullshit comparison now. The average taxpayer and a mega-corp aren't even close to the same when it comes to tax liability.
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LynnwoodRooster,
Yes - that is my point exactly. Avoiding tax is legal. I'm saying that while it is within the letter of the law, it's the spirit of the law that is injured.
Worse, it is a shareholder cause of action of the corporation does not do all it legally can to avoid a tax.
I'm saying that we need to re-write the law so that "If you make a profit in the US, then you pay a tax in the US."
Are taxes too high? I think a 35% tax rate on profit does seem high to me. On the other hand, it doesn't matter what
Re:Why is this a problem? (Score:4, Interesting)
Treasury bonds are an investment instrument.
Yeah, but an important part of an investment . . . is the liquidity. I own some US Treasury E-Series bonds, and cannot find a bank in Germany that is willing to cash them.
If I listen to the bank, they claim is the problem is with the US government, who want to place more spyware in their systems than EU privacy laws allow. A court order in Germany will give the authorities full access to any private medical or financial data about you. The US government spooks want to access data with no court order or judge involved.
If I listen to the US government . . . the evil EU governments are shielding terrorists with their evil privacy laws.
It's like listening to a couple that is involved in a nasty divorce . . . the actual truth lies somewhere between the claims . . .
At any rate, I'm planning a trip to Switzerland to cash the bonds . . . in Texas mileage units, Switzerland is "Just Down The Road . . . A Ways" . . .
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No need. Instructions here: https://www.treasurydirect.gov... [treasurydirect.gov]
Yeah . . . I've seen that info . . . but the whole process sounds like a royal pain in the ass . . . especially since the US folks will withhold tax money, which *I* will need to jump through hoops for, to get it back . . . this can take years. I had the same problem when a company in the US *awarded* me with stock options . . .
The authorities cannot stock drug dealers, terrorists and business tycoons from laundering billions of dollars . . . . but the authorities *can* make life for simple folks difficul
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I don't doubt that is what they told you. The E series bonds are paper bonds last issued in 1980 with a 10 year maturity (extended twice) which mean they stopped collecting interest in 2010 at latest and there has been a drive to collect them and an offer to exchange them for another series of bond (both now closed). With that information it is quite obvious to me why banks might hesitate to cash you bonds...
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Here the quote from "The PolygamistRanchSister", who lives in the US:
You need to complete this form: https://www.treasurydirect.gov... [treasurydirect.gov] You will need to sign the bonds at a US consulate or equivalent so they can "validate" that you actually signed. I'm sure you will need lots of ID. You will need your social security number. You need to include Dad's death certificate - that I had sent to you. Then you need to mail the bonds to: Treasury Retail Securities Site P.O. Box 214 Minneapolis, MN 55480 In the form you will need to specify a bank account in which the money will be deposited. This cannot be a Germany bank. So... you will need a bank account in the US. Then we would have to find a way to wire the money from the US bank to your bank in Germany.
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The E-Series bonds stopped earning interest in April of this year.
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. . . April, 1987 issue date . . . I just checked . . .
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From what i can find this applies to some of the EE-series not the E-series.
You are correct . . . the bonds say "EE-series" on them . . . not to be confused with the E-series . . . or the former UNO President "Boutros Boutros-Gahli", who is not to be confused with the issuer of the E-series bond, simply known as, "Boutros Gahli" . . .
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I've been told - TOLD! - that in reality Apple has all its cash and equivalents in gold bullion and Tim Cook swims around in an Olympic Sized Pool of that bullion chanting "it's mine!
GIFs, or it didn't happen
My Sig spits 40 cal lead
. . . get a Heckler & Koch MP7 instead . . . the ammo from that . . . well, . . . full body armor isn't going to help you very much . . .
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There is a limit of how much you should allow to sit there doing fuck all. A lot of those treasury securities should be dumped to by capital assets, even buying up content like Sony, makes far more sense that just letting it rot with likely self destructive treasury securities of a collapsing empire. Once you talk billions it is insane not to seek to dump the empty debts by buying up capital investments and not underwater front ones, commercial and industrial properties, mines, agribusinesses, content (don'
Actually, it does (Score:2)
"That doesn't make the government beholden to Apple or anything"
It does in a way, because if Apple decides to liquidate its holdings the sale can and will raise interest rates.
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That doesn't make the government beholden to Apple or anything.
That depends on the quantities involved. As the old saying goes, "if you owe the bank $1,000, the bank owns you. If you owe the bank $1M, you own the bank" (I did say it was an old saying). If Apple were to get up to the levels of China and Japan, they'd own the USG.
The USG has actually used this trick itself in the past when it told the UK to get out of Egypt during the Suez Crisis or it'd crash the pound. So there's certainly precedent for it.
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In this scenario, Apple is the bank, not the USG. So if Apple loans enough money, the USG owns them.
Are we proud? (Score:2)
China and Japan, which hold over a trillion dollars in U.S. government debt each -- which has caused considerable hand-wringing in Washington.
Can someone who is in the know tell me whether we as Americans should be proud of this and why?
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It means China and Japan are keeping you economically afloat by funding your deficit spending. On the other hand, it means China and Japan have a strong vested interest in not having the US go bankrupt, or devalue the dollar massively by printing its way out of debt, so China is not likely to economically destroy your economy the way it otherwise could and might.
It's a kind of MAD situation. You better just hope that they do not decide at some point to stop pouring good money after bad, and if you keep go
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Indeed. When you owe the bank $10,000, that's your problem. When you owe the bank $10,000,000, that's the bank's problem.
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The dollar is the reserve currency
The Dollar is a reserve currency, albeit currently the majority one, accounting for just under two thirds of foreign exchange holdings. There are maybe half a dozen major currencies that are used, the second largest being the Euro, which accounts for about 20% of the total.
and so by definition the US has to run a trade deficit,
With your original statement (premise) being incorrect your inference is similarly wrong. The US could be exporting goods and services to other countries to the same degree it's importing them, but being paid for them in Euros (European U
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No one buys US government debt to collect interest anymore, yields are simply too low (this is the great bubble Greenspan was recently talking about). That hasn't decreased demand as there are still numerous uses, most relating to that it is considered by many as the safest and most liquid asset available. The bet is that the US government can and will honour their debt far better than anyone else both short and long term.
Wise move by Tim Cook (Score:2)
in case something like this happens:
TRUMP: If you don't start making iPhones in USA to Make America Great Again, imma tell all the Breitbart readers to sell AAPL. Then your stock price will tank and you'll be sorry!
COOK: If you do that I'll dump all my US treasuries, interest rates will go up and tank the economy. Then you'll be a one term President!
I hope not all think "foreign debt" is normal (Score:2)
I for one like to work for money I can spend on goods and services, rather than paying interest.
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The interest paid on the mortgage you'd otherwise have is every bit as pissed away as the rent on the apartment. Interest is just rent on money, rent is just interest on borrowed non-monetary capital, they're the same thing. You want to minimize them both, and sometimes you can pay less in rent than you can in interest, depending on what housing options are available, in which case you save more money renting than borrowing. Money that should be put toward eventually buying without having to borrow as much,
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No, it's not. At least not necessarily.
Especially with very low mortgage interest rates we have had for the last ~decade, you can in theory make more money by investing the money.
For example, using simple interest, if you have $1000 mortgage at 3.5%, in a year you pay $35 interest directly on that $1000. But you're not really paying the full $35, you're getting part of it back due to deductions,
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You're talking about borrowing money to invest it. I'm talking about borrowing money that will be immediately spent on a house and unavailable to invest (besides the appreciation on the house).
You're either paying rent and saving and investing the rest of your money (which will eventually go toward buying a house), or paying interest and also paying down the principal debt on a house with the money you would otherwise be saving and investing. If the rent is lower than the interest on the mortgage, that leav
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My total mortgage payment, including interest, is lower than what many others in the area pay for rent. Yes, they may think their place is better, but Iâ(TM)m talking about just financially.
Of course my borrowed money went to pay for the house. My calculations in my original reply were comparing paying back the loan vs investing that money. So I didnâ(TM)t borrow money TO invest it (not counting my house), I am investing what OTHERWISE would be paying back the loan faster or having paid in cash
Re: I hope not all think "foreign debt" is normal (Score:2)
Debt is the flip side of savings, if I have more money than I need right now it's better off invested in someone else's business making money. That applies equally well on the country level. Of course the one putting themselves in debt should consider why and how much, but there is good and bad debt. It's not all bad.
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A couple of things...
1) As a US citizen I have 0% control over how much my country spends under my name. I was told I could vote for these things but when I said I didn't want to pay I was threatened with jail and violence. I was told I could vote for that, too.
2) Most US citizens are so financially illiterate they can barely open a bank account by filling out their name on a form. Some of this is not their fault as they have never learned about the financial system. If they did, they would burn every
A few more things. (Score:1)
4) You don't have 0% control, you equal control along with every other voter. Most of those voters don't agree with you--that doesn't mean you are unrepresented, it means that people are fully aware of your stupid ideology and they have decided to vote differently.
5) Oh, we shouldn't have a Treasury or Federal Reserve? I take back calling you an idiot, you're actually a complete fucking moron.
6) you are completely free to pick up and move to a country that
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It depends how the money is spent. I'll borrow money all day at the, what, 0.5% the US government is charged, and invest it in other things, and I should be making money after interest.
"I've never gone in debt" is saying "I've never attempted a project/investment larger than I could support at the time."
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"I've never gone in debt" is saying "I've never attempted a project/investment larger than I could support at the time."
And permanently being in debt is saying "My attempts into projects/investments I could not support when I started them were unsuccessful, thus I spend the rest of my life working for the profit of my creditors."
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Again, it depends. If you are permanently taking the profits of the your projects and growing them, then rising in debt is fine.
And, if you strike out, then you can fall back on bankruptcy. No need to spend the rest of your life working your way out of debt. Bankruptcies leave your credit file after 7 years.
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For large scale projects in for example infrastructure it makes quite a bit of sense for the government to borrow money as the alternatives are often worse.
One day (Score:2)
One day all governments will be Apple.
old story...you owe the bank $100 (Score:2)
Who has clout? (Score:2)
CEO Tim Cook might have considerable political clout in the United States
It is the other way around, US has clout on Apple! When you own 10000 dollars to the bank, you worry, when you own one billion dollar to the bank, the bank worries.
If someday US wants to collect taxes on Apple, there will be no need to look for money in fiscal paradises, just seize the treasury bonds.
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Do you think those treasuries are owned by Apple, US division? They're owned by the subsidiaries in the fiscal paradises.
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How much tax money do they owe the US government? (Score:2)
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The government should just void Apple's treasury assets and call it a day.
What you're proposing is absurd because it's a proposal of government seizure of assets.
What if government chose to confiscate your savings, checking, and retirement accounts and called it a day?
Breakup these monopolies already (Score:1)