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Apple's cash hoard set to top $250 billion
By Thom Holwerda on 2017-05-01 10:56:54

Apple Inc. is expected to report Tuesday that its stockpile of cash has topped a quarter of a trillion dollars [actual source is the WSJ, but it's paywalled there], an unrivaled corporate hoard that is greater than the market value of both Wal-Mart Stores Inc. and Procter & Gamble Co. and exceeds the combined foreign-currency reserves held by the U.K. and Canada combined.

The goal of a capitalist, free market-based society is that as companies get more successful, they invest their winnings back into the company, increasing productivity, hiring more people, and thus improving the overall state of the economy. While inherently flawed, this system has brought us a lot of good, and has lifted quite a number of people out of abject poverty.

However, one has to ask what individuals and corporations hoarding this much money as Apple is doing are contributing to society. Apple's 250 billion dollars are locked away, and aren't used for anything. Every day, Apple is extracting vast sums of wealth from society - as they should in a capitalist society - but they are no longer investing it back into society. And Apple isn't alone in this, of course - a rich few are extracting immense amounts of wealth from society without giving back.

This breaks the traditional capitalist model.

Things like increased automation and robotisation are only going to accelerate this process. At some point, we're going to have to stop and ask ourselves if this is tenable, and if not, what we are going to do about it. It goes against the core 'values' of die-hard capitalists, but we might reach a point where we have to forcibly - through law - take it from companies like Apple.

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Read Comments: 1-10 -- 11-20 -- 21-30 -- 31-40 -- 41-41
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Not true
By Kondor337 on 2017-05-01 11:20:05
It is certainly debatable whether it is a good thing if a single company owns 250 billion in cash and short term investments, but your conclusion that "Apple is extracting vast sums of wealth from society" is totally wrong. An economy does not work like that. Apple does not really have 250 billion dollars in 100-dollar notes put in some kind of money bin.

When Apple says they have "cash", they are talking about something that is more like the money you have in your cheque account, i.e. the funds are liquid.

Of course, no one would argue that when people have large sums of money in their bank account, they were "extracting wealth from society".
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Comment by M.Onty
By M.Onty on 2017-05-01 11:23:52
Its an absurd amount.

Either; they've got a serious case of corporate neurosis about previous cash crises, and just cannot stop saving for fear of not riding out the next. That amount just doesn't make rational sense any more, even as security.

Or; they intend on launching some fantastically expensive new project at some point in the next decade. Moonshot expensive.

If its the first then Thom's right, Apple becomes a dysfunctional part of the system. If its the latter, that that's all terribly exciting and all, but for how long is it acceptable to put up with an open sink hole like that in the economy?
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RE: Not true
By M.Onty on 2017-05-01 11:25:53
> Of course, no one would argue that when people have large sums of money in their bank account, they were "extracting wealth from society".

That's exactly what is often argued. I'm not an economist, so could be wrong, but my understanding is that reserves are not classically seen as being a productive part of the economy.
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404 and Communists
By M.Onty on 2017-05-01 11:32:58
Slightly off topic. But the Morning Star home page is a 404. I've never seen that before on a reputable news site!

Also its entertaining for a British reader to find an investment, bonds and shares advice website that shares a name with the Communist Party of Great Britain's tabloid of the same name.
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RE: Not true
By kwan_e on 2017-05-01 11:40:56
> An economy does not work like that. Apple does not really have 250 billion dollars in 100-dollar notes put in some kind of money bin.

The money did not come from nowhere. People paid into this pile with actual money they had. The point you're missing is not whether there's actual physical money, but that it is not fake money like stock options. It is money that people literally worked and got paid for, producing value for the economy, only for that value to be locked away because they gave it to Apple.
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monopoly profits and tax avoidance
By puenktchen on 2017-05-01 11:54:31
In the happy capitalist utopia which is painted in economy text books this hoarding of capital can't happen. In reality it does because thanks to generous protection of intellectual property Apple does sack in monopoly profits from its customers. I know, I'm one of them since decades. On the other side it can dictate prices to its suppliers because of its sheer size. Again, not a free market working as perfect as in the text book. And in the end it doesn't pay its share of the costs to organise those markets to society because of ingenious tax avoidance schemes.

All of those problems could easily rectified if our governments would do their fucking job.
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Comment by sj87
By sj87 on 2017-05-01 12:00:42
Once before I read that Apple makes so much money it doesn't even know how to invest it... Then I read that Apple is constantly trying to kill the business of refurbished iPhones and iPads and Macs... This is not just by making their stuff intentionally unfixable as much as possible, but also by lobbying for new laws and regulation.

At least Apple knows just where it will never ever want to invest, that is its customers.
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RE: Not true
By jonsmirl on 2017-05-01 12:09:30
Most of the cash pile is invested in US Treasuries. So it is doing something; financing the US deficit.

Money is always doing something, you can't stop it from working for somebody. Even cash in a mattress is working. It is again financing the government. The only way to stop it is to buy something like precious metals.

The argument being made here is -- who gets to choose what that money is doing. Right now Apple is choosing low yield treasuries. Those treasuries pay interest which helps drive the stock price up so you are getting a yield too.

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How much inequality has Apple created? I've been in the line buying groceries a dozen times now when the person in front of me paid with a Food Stamps card while talking on their iPhone. A poor person owning an expensive $600 iPhone is a powerful contribution to inequality.

Edited 2017-05-01 12:15 UTC
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RE[2]: Not true
By kittynipples on 2017-05-01 12:17:05
Reserves are the "cash" that banks are typically not allowed to lend out to prevent them from becoming illiquid; i.e. they are kept in reserve.

Most of the balance you have in your bank account goes right back out the door to borrowers.

Edited 2017-05-01 12:20 UTC
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Comment by kittynipples
By kittynipples on 2017-05-01 12:23:25
> ...but we might reach a point where we have to forcibly - through law - take it from companies like Apple.

Yes, expropriation has so much more legitimacy when you clothe yourself in law before sending in the thugs with guns.
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