America’s energy prospects improve, while Greece continues to struggle with debt, Apple settles with a rival, as Starbucks, Google and Amazon face tax questions in Britain, and American consumers continue to exchange their bank books for credit union membership.
U.S. on Track to Become the World’s Largest Oil Producer
The International Energy Agency forecasts that the United States will become the world’s biggest oil producer by the end of the decade and will be energy independent by 2030. Currently the U.S. imports around 20 percent of its total energy supply.
The dramatic turnaround in the country’s energy profile is because of a combination of high world prices and technological breakthroughs that have allowed the efficient and cost-effective extraction of previously unreachable natural gas and oil reserves.
U.S. crude oil and natural gas production increased 14 percent and 10 percent, respectively, between 2008 and 2011.
As global energy demand continues to increase, America will become a net energy exporter within twenty years. Its balance of trade is expected to shift eastward toward the Middle East, India and China.
Greece Passes its Latest Austerity Budget
The Greek Parliament passed another austerity budget on Monday. This is latest in its attempts to appease its creditors and hasten the indebted country’s next infusion of financial support from the European Central Bank and the International Monetary Fund.
Eurozone finance ministers are expected to approve a $40 billion aid package for Athens, now that the country’s coalition government has agreed to make budget cuts totaling approximately $12 billion next year. The Greek economy is mired in its sixth year of recession and is expected to contract another 4.5 percent in 2013.
Continued austerity measures promulgated by the government have prompted numerous protests and demonstrations from the Greek population, already burdened with relatively high prices for basic products and services, as well as an unemployment rate above 25 percent.
Apple Settles Patent Dispute with HTC
Apple CEO Tim Cook is doing away with predecessor Steve Jobs’ intense and attack-oriented litigation strategy against alleged copyright infringements by various international competitors.
The world’s most valuable firm recently settled all its global lawsuits against Taiwan- based HTC Corporation, the first company it sued for violating its iPhone patents. HTC stock rose over 6 percent after the agreement was announced.
While its settlement with HTC signals Apple’s new willingness to resolve differences out of court, the company is still tangled in worldwide patent violation lawsuits. Its main battle now is against Samsung Electronics, which appealed a $1 billion payment awarded to Apple in August.
Starbucks, Google and Amazon Face U.K. Tax Questions
British lawmakers plan to question executives of three large American companies – Starbucks, Google and Amazon – to find out how the companies have managed to pay relatively low taxes on the billions of dollars of sales they rack up in Britain every year.
Starbucks reportedly paid no corporate taxes to the UK in the past three years. Over a 13-year period with U.K. sales totaling 3.1 billion pounds ($4.92 billion), the company paid only 8.6 million pounds in taxes. Google had 2.52 billion pounds in U.K. sales in 2011, on which it paid 3.4 million pounds in taxes. And Amazon paid less than 1 million pounds in tax last year on U.K. revenues worth between 3.33 and 4.53 billion pounds.
Starbucks maintains that it pays its fair share and follows the tax rules in every country in which it operates. Amazon, on the other hand, appears to avoid high tax rates by channeling its sales through units in other European countries. Google’s possible evasion methods are as of yet unclear.
Credit Unions Gain on Banks
For the first quarter of 2012 membership in the nation’s credit unions increased by 667,000, according to a recent report by the National Association of Federal Credit Unions, a Virginia-based trade association.
The switch from private banks to depositor-owned credit unions began in earnest on November 5, 2011, a day known as “bank transfer day.” Consumers, fed up with banks’ bad behavior and the imposition of new fees, pulled their money out of neighborhood banks and joined credit unions in growing numbers.
Unlike banks that have to make profits for their investors, credit unions can return their profits to their members in the form of lower fees and interest rates.
Photo: Tupungato / Shutterstock.com
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].