{"id":4686,"date":"2011-09-02T08:11:24","date_gmt":"2011-09-02T14:11:24","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=4686"},"modified":"2018-09-21T02:04:42","modified_gmt":"2018-09-21T06:04:42","slug":"lack-of-growth-opportunities-remains-the-big-issue","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2011\/09\/02\/lack-of-growth-opportunities-remains-the-big-issue\/","title":{"rendered":"Lack of Growth Opportunities Remains THE Big Issue"},"content":{"rendered":"

 <\/p>\n

Whew!\u00a0 My wife Dawn and I have made the cross country trek from Santa Fe, New Mexico to New York City and I begin my new responsibilities as a Content Director at the CFA Institute on Tuesday.\u00a0 And, more importantly, Verizon, sidelined by a workers strike, has finally installed super fast fiber optic Internet in our apartment.\u00a0 Fantastic!\u00a0 So back to the blog…<\/span><\/p>\n

Today I wanted to focus on the biggest issue facing the U.S. economy.\u00a0 It’s not the unemployment rate and it’s not the U.S. government debt crisis<\/a>.\u00a0 No, instead, it is the lack of innovative ideas.<\/span><\/p>\n

[By the way, I am finally being joined by a chorus of investors including PIMCO’s Bill Gross<\/a>.]<\/span><\/p>\n

As I have been highlighting since the late autumn of 2010 U.S. companies are sitting on mountains of cash<\/a>.\u00a0 Seemingly these businesses are bereft of growth opportunities.<\/span><\/p>\n

Ironically, the Federal government debt crisis led to a decrease<\/em> in yields on U.S. debt as nervous investors bid up the price of those same, downgraded, bonds.\u00a0 It was reported that many of the buyers were corporate treasurers trying to earn yield on their cash positions.\u00a0 Yet, the buying from all investors was so great in some instances that the real interest rates actually went negative for a little while.<\/span><\/p>\n

What does it mean when real interest rates turn negative?\u00a0 First, real interest rates are simply nominal interest rates less the inflation rate.\u00a0 The idea is that, yes, you earn interest when you lend your money to someone.\u00a0 But that interest rate, at the very least, has to compensate you for the rise in inflation.\u00a0 If not, then effectively you are paying for the privilege of having your<\/em> money borrowed.<\/span><\/p>\n

So could there be any greater evidence that U.S. businesses are running out of innovative ideas than when they actually pay the Federal government for the privilege of borrowing corporate money?<\/span><\/p>\n

To recount what has been enumerated many times, U.S. businesses could:<\/span><\/p>\n