All right. Let's say you're correct, and companies are hoarding cash to manipulate the financial system. Furthermore, let's say that the Fed is not going to react to this.
ExxonMobil made about $40 billion in the last year. If they save every single dime (in cash, not in savings accounts, investments, or anything else that transfers liquidity), they will be able to reduce the money supply by -- wait for it! -- almost 3%! That is a gross change of 3%. Factor in the expanding money supply, and Exxon hasn't even reversed inflation, much less brought about a deflationary crunch.
Even if they can do this, how much do they benefit? Exxon will have sacrificed the interest on $40 billion in cash (that is a lot of money, even these days) in a risky scheme to reduce asset prices. But Exxon isn't the only bidder -- it has a market value of $460 billion, compared to a global market value of $51 trillion (http://en.wikipedia.org/wiki/Market_capitalization). So if Exxon is using their stock, and they're a rational actor like everyone else, they're going to take 100% of the risk for less than 1% of the benefit. In other words, the total return on their 'investment' in deflation has to be at least 10,000%!
And even then, you have to factor in their shareholders' reactions. Manipulating the money supply is not exactly a great use of corporate cash, and you can't even admit that you're doing it if you want the manipulation to work (otherwise, other actors will treat the mysterious, tiny drop in money supply as a temporary aberration, knowing that Exxon will cut it out some day). Given this apparent flagrant waste of corporate resources, you might expect their stock to drop precipitously. Exxon earns about 39% on equity (probably something closer to half that on marginal equity). Dropping that to zero won't make shareholders happy, and I don't think that risk is priced into the stock at $86/share.
you took it insanely; I mean what I said, they are holding cash, while other companies struggle - then acquire. Them holding the cash has nothing to do with the other company.
ExxonMobil made about $40 billion in the last year. If they save every single dime (in cash, not in savings accounts, investments, or anything else that transfers liquidity), they will be able to reduce the money supply by -- wait for it! -- almost 3%! That is a gross change of 3%. Factor in the expanding money supply, and Exxon hasn't even reversed inflation, much less brought about a deflationary crunch.
Even if they can do this, how much do they benefit? Exxon will have sacrificed the interest on $40 billion in cash (that is a lot of money, even these days) in a risky scheme to reduce asset prices. But Exxon isn't the only bidder -- it has a market value of $460 billion, compared to a global market value of $51 trillion (http://en.wikipedia.org/wiki/Market_capitalization). So if Exxon is using their stock, and they're a rational actor like everyone else, they're going to take 100% of the risk for less than 1% of the benefit. In other words, the total return on their 'investment' in deflation has to be at least 10,000%!
And even then, you have to factor in their shareholders' reactions. Manipulating the money supply is not exactly a great use of corporate cash, and you can't even admit that you're doing it if you want the manipulation to work (otherwise, other actors will treat the mysterious, tiny drop in money supply as a temporary aberration, knowing that Exxon will cut it out some day). Given this apparent flagrant waste of corporate resources, you might expect their stock to drop precipitously. Exxon earns about 39% on equity (probably something closer to half that on marginal equity). Dropping that to zero won't make shareholders happy, and I don't think that risk is priced into the stock at $86/share.
So. Your theory is insane.