Below is data compiled from Bloomberg and Fortune revealing the Top 10 U.S. Companies who avoided tax on foreign profits.

1. General Electric (GE)
Untaxed foreign profit: $94 billion

2. Pfizer (PFE)
Untaxed foreign profit: $48.2 billion

3. Merck (MRK)
Untaxed foreign profit: $40.4 billion

4. Johnson & Johnson (JNJ)
Untaxed foreign profit: $37 billion

5. Exxon Mobil (XOM)
Untaxed foreign profit: $35 billion

6. Citigroup (C)
Untaxed foreign profit: $32.1 billion

7. Cisco Systems (CSCO)
Untaxed foreign profit: $31.6 billion

8. IBM
Untaxed foreign profit: $31.1 billion

9. Procter & Gamble (PG)
Untaxed foreign profit: $30 billion

10. Microsoft (MSFT)
Untaxed foreign profit: $29.5 billion

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Here is an info graph from Visualizing Economics (back from 2008), showing the average income in the U.S from 1913-2006. The graphic factors in major events in history as well as the presidents at the time. Something the graph is missing appears to be inflation. However, its pretty cool comparison.

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Check out this info chart from Visual Economics for suggested routes for investing.

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Check out this article from WSJ: China Takes Aim at U.S. on Economy By ANDREW BATSON, IAN JOHNSON And ANDREW BROWNE

Couple of issues discussed;

• Premier Wen Jiabao said U.S. efforts to boost its exports by weakening the dollar amounted to “a kind of trade protectionism.”
• Recent deterioration in what he (Jiabao) called China’s most important foreign relationship was because of the arms sale to Taiwan and meeting with the Dali Lama.

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The price of oil has risen to $83 a barrel as result of the following factors:

• A weakening U.S. Dollar
• Strong demand from China (China reported that their oil imports rose 14% last year)
• Investors buying commodities as a hedge against inflation
• Demand in heating oil due to a string of cold winter weather in parts of the U.S., Europe, and Asia.
• Nigerian instability (Chevron pipeline attacked, reducing production) 

JBC Energy:

“Investors might be overvaluing and thereby multiplying the impact of cold temperatures,” said JBC Energy in Vienna. “To make a significant impact the chilly weather will have to remain with us for months and not weeks.” 

KBC Market Services:

“If prices continue to rise next week, it will be tempting to conclude that we are back in the casino-like oil market conditions we saw in 2008,” KBC said in a report.

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Pull out the red carpet Wall Street… Ben Bernanke is the Person of The Year!!! Why you ask? Well Time credits Bernanke’s leadership for the recovery in 2009. Richard Stengel Time’s managing editor said, “The recession was the story of the year. Without Ben Bernanke… it would have been a lot worse.”

For the full article, Time

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The U.S Dollar Index has risen to its highest level since the beginning of November. As gold tops all the headlines, the U.S Dollar is positioning its self as the underdog ready for a comeback! The question is not “will the dollar comeback?” the question is “when will the dollar comeback?”

Observing the 50-day moving average, indications are the dollar has reached its bottom or its low range, given no one can ever call a bottom until it has passed (or unless you have time machine!). The dollar has closed above its 50-day moving average for three consecutive days. March was the last time that happened.

Yes, technical indicators can be misleading. However, you can’t deny the strength the dollar has gained in the short term!

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Oil on Friday declined more than 2.5% to about $76 a barrel as fears mount about the possible defaults in Dubai financial markets. Adding to the pressure was the boosted demand for the U.S. Dollar. However, Dubai’s recent news only indirectly contributed to the decline. Crude oil has been sinking since it peaked at $82 a barrel in early November. A large inventory in the U.S and discouraging economic data is more to blame for the decline.

Additionally, the market was trading at low volumes that could have exaggerated prices!

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The Federal Reserve on Monday announced that they are monitoring the falling U.S. dollar, but leaving interest rates unchanged to assist in an economic recovery. Low interest rates can stimulate an economy by allowing consumers and businesses the ability to spend more. However, low interest rates are straining the dollar and if a weakening dollar can’t be stabilized we could potentially risk a new economic crisis. Led by investors reducing their dollar holdings which would likely result in increased domestic interest rates.

The world’s strongest currency was once backed by gold and today it’s back by a promise! A promise made by the U.S government that the dollar can be convertible in an exchange. That promise seems as unrealistic as us (U.S.) ending our dependence on foreign oil!

By using the dollar as an economic tool to spur an economic revival from the worst economic crisis since the great depression, is like holding on to a double edged sword. No matter how you hold it, you’re going to end up cut. Which do you prefer; having a weak dollar vs. a strong dollar or having a strong dollar vs. a weak dollar?

The Benefits of a Weak Dollar

• U.S. companies export more goods to foreign market because those goods become less expensive
• Increase in foreign investment opportunities in the U.S.
• Increase in U.S. tourism

The Disadvantages of a Weak Dollar

• Higher prices for consumer as a result of currency dilution
• Higher interest rates
• More expensive for Americans to travel overseas

The Benefits of a Strong Dollar

• Importing goods becomes cheaper
• Increase in American investors buying foreign assets and other investment opportunities

The Disadvantages of a Strong Dollar

• American companies competing against foreign companies becomes much more difficult
• U.S. tourism is reduced

So rather than asking yourself which dollar you prefer, ask yourself how can we balance between a strong and weak dollar?

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