Click on any image to enlarge.

$$$-The Worlds Biggest Cash Hoards-$$$

(or at least the most interesting)

Ok, this doesn’t really have anything to do with the theme of this site, but I don’t care. A few weeks ago I got mildly obsessed researching companies and funds sitting on large quantities of pure cheddar. I thought I’d put together a list of some of my favorites from other arenas as well.

The Government Pension Fund of Norway

This entity is a friggin’ sledge hammer. Formed in order to manage the massive profits the Norwegian Government derives from the sale of petroleum and gas reserves. The fund’s value as of 2010 is over $443 billion. About 60% is invested in stocks, which means the fund controls about 1% of the value of all publicly traded companies on Earth.

This money does not pay for current government expenditures, it is only a “for the future” fund… and as such it keeps growing and growing at a rapid rate. This is a well run fund too. It’s investment returns were negative in 2008 because of the global economic meltdown, but not as bad as the broader market. In 2009, they had a record year, well outpacing gains made in public stock indices. And the petroleum profits just keep rolling in. In classic ”selling alcohol to the Indians” fashion too, Norway has increasing moved away from non-renewable energy domestically. If they successfully achieve being carbon neutral by 2050 (a gov’t mandate), it will be the culmination of the greatest policy version of the drug dealer adage ”don’t get high on your own supplies”.

Technically, Chinese and UAE sovereign wealth funds are larger as of this time. However, I find the Norwegian fund far more interesting because Norway’s population is only 4.9 million, and they are stable enough to not really need the money for quite some time. Also, as is usually the case when a country becomes extremely wealthy and educated, they stop having children. They are not as bad as the Japanese, who are experiencing a population decline, but their yearly growth rate is only .34%… so even as the fund grows exponentially in value, the number of citizens it is to be doled out to will barely increase. Being born a US citizen, a person begins life with a current debt of -$43,101 according to the present budget deficit… contrast that to a Norwegian citizen who is born into the world possessing +$90,408. Here is an estimate of how far that gap is likely to widen…

US Budget Deficit 2010= $13.3 trillion – estimated 2014 Deficit $19.8 trillion

Average Debt per US Citizen 2010= -$43,101 – estimated 2014 Debt -$62,420

Norwegian Pension Fund Value 2010= $443 billion – estimated 2014 Value $765 billion

Average Wealth per Norwegian Citizen 2010= +$90,408 – estimated Wealth per Citizen 2014 +$153,000

The Government Pension Fund of Norway is awesome. The Government Pension Fund of Norway is badass. So far, they have not been very political with the handling of their wealth, instead prudently choosing to fly under the public radar. They do however refuse to invest in companies that manufacture cigarettes, weapons, or have a history of corruption. To put the wealth in another light, one more controversial (and hence more entertaining)…

Estimated US Defense Budget 2014= $700 billion

Estimated Norwegian Pension Fund Value 2014= $765 billion

At some point, it is inevitable that the Pension Fund surpasses something even as seemingly unsurpassable in size as the US Military Operating Budget. Theoretically, if the United States ever went berserk and attempted to wage an unjust war against many nations… the Norwegians would only have to partner up with a manpower rich nation with a defense apparatus of it’s own (think Russia, China, Japan), and it would be able to underwrite weapons procurements for at least a couple years… probably longer. In a word, Norway could fund and tip the balance of a World War if it chose to do so… that’s how wealthy this fund is.

Apple Computers

As of this writing Apple is sitting on $45.8 billion…. that’s cash on the barrelhead son. It is the largest pile of cash held by any company in the US. Where it gets bizarre, is that Apple has shown no interest in paying a dividend, buying back shares, or making any major acquisitions. Basically, it’s a huge pile of cheese that exists for no particular reason whatsoever. It’s August 13 2010 right now, minor stock news yesterday entailed a research analyst publishing an “open letter” to Apple, calling upon it to at least begin a dialogue with share holders as to what, if anything, it intends to do with all that cash.

Apple has typically had a borderline contemptuous relationship with stock holders, prioritizing the handing over of stock options to employees rather than give the money to “outsiders”. So it will be interesting to how this shakes up in the next few years. It should be noted that unlike oil companies, even the most advanced tech company probably does not need this many billions of dollars just to fund R&D.

I have my own theory: As soon the reserve hits $50 billion, Steve Jobs intends to sneak into work on a Saturday morning, and load up the 40 or semi-trucks it would take to carry $50 billion in $100 bills. He will then motorcade the cash down to Mexico, and hideout the rest of his life drinking margaritas. You heard it here first folks.

2007 Chemical Supplier Drug Bust

The largest single haul of drug related cash took place in Mexico City, March 2007. The residence was owned by an illicit supplier of chemicals crucial to the production of Meth. Total value of the cash was $207 million, with the vast majority in US Dollars. When I see a sum of money like this, I can’t help but think the owner must have had this conversation in his head as he passed $50 million:

“Man… this is waaay too much cash to have laying around. I have got to find somewhere to stash this mofo.”

Then the same conversation when he passed $100 million.

“Seriously guy, I mean seriously. You have got to do something about this cash. Get it split up, get it somewhere else… just don’t keep storing it here in one place.”

And especially $200 million.

“C’mon now, get it together. It’s time to stop putting this off and get this place in order. This has gotten ridiculous.”

Of course, this might have only been one of many of these cash stash houses for all we know. It’s not unthinkable that a gang with the kind of business acumen to assemble $207 million couldn’t have also had stashes of $80 million or so spread out elsewhere. If that’s the case, I hope whoever found any alternative stash was a house cleaner or other nobody, who then went on a Hollywood style spending spree. Most likely of course, it would have just been confiscated by corrupt Federales, but that’s not as fun to imagine.

You can see more pics of the money and other goodies the DEA seized here. http://www.justice.gov/dea/pubs/pressrel/pr032007.html

Ted Binion’s Silver Hoard

The son of infamous casino owner Benny Binion, Ted Binion’s life was a priveleged though tragic one. For some time he had developed a fetish for silver (and drugs… and strippers). Not just in terms of pure quantity, but also in choosing specific pieces based on their uniqueness and quality. He had been storing this vast collection (later valued at $7 million) underneath the casino his father started, The Horseshoe in Las Vegas Nevada. However, difficulties with the Nevada Gaming Commission transpired, and he and his silver were forced out.

This is where things get dicey. Needing to liquidate or move this hoard, he contracted a “friend” of his to build him an underground vault beneath one of his homes in Pahrump Nevada (about an hour and a half outside of LV). This ended up not being the best idea. Within 3 months, Ted Binion was dead. It became apparent that his stripper girl friend and the vault contractor conspired to kill him, in order to make off with the stash of silver… as well as other household valuables.

It just goes to show to all you would-be cash hoarders… don’t hoard too much cash, because someone might physically kill you for it. Anyone who has seen an Uncle Scrooge McDuck cartoon is familiar with the image of Uncle Scrooge swimming through his massive vault of gold coins and other goodies. In the real world, if you try to pull a Scrooge McDuck you are likely to have someone stab you in the back for it.

Interestingly, during the process of this silver collection being liquidated, the story itself is now used as a promotional tool. “Buy a piece of the Binion Hoard Collection, and own a piece of history.”

Now that’s some classy advertising.