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Administrator- Joined
- May 11, 2013
- Posts
- 25,109
- Reaction score
- 13,676
- Points
- 2,870
(The Guardian) Why hasn’t the US created a sovereign wealth fund before, and why now?
Sovereign wealth funds generally exist in countries that either have large foreign exchange reserves, such as China, or revenue from the sale of oil or other commodities, like Norway and Saudi Arabia. The US, however, has consistently run budget deficits in recent years.
There are in fact some US states that do have smaller wealth funds, generally funded by commodities or land. The largest is the Alaska Permanent Fund, started in 1976, which currently manages about $82bn.
But the size of the American private investment sector on Wall Street and beyond is such that various investment managers and private equity firms manage large pools of capital. That reduces both the need for and availability of capital for a sovereign wealth fund to exist, absent political will.
Bessent said the US sovereign wealth fund would be set up in the next 12 months. While on the election campaign trail in September, Trump proposed setting up a fund which would finance “great national endeavours,” including infrastructure projects such as highways and airports, manufacturing and medical research.
Trump also suggested, without providing specifics, that the fund could be used to keep TikTok operating in the US. TikTok is now operating due to an extension Trump granted prolonging the deadline for a forced sale or shutdown.
www.theguardian.com
Sovereign wealth funds generally exist in countries that either have large foreign exchange reserves, such as China, or revenue from the sale of oil or other commodities, like Norway and Saudi Arabia. The US, however, has consistently run budget deficits in recent years.
There are in fact some US states that do have smaller wealth funds, generally funded by commodities or land. The largest is the Alaska Permanent Fund, started in 1976, which currently manages about $82bn.
But the size of the American private investment sector on Wall Street and beyond is such that various investment managers and private equity firms manage large pools of capital. That reduces both the need for and availability of capital for a sovereign wealth fund to exist, absent political will.
Bessent said the US sovereign wealth fund would be set up in the next 12 months. While on the election campaign trail in September, Trump proposed setting up a fund which would finance “great national endeavours,” including infrastructure projects such as highways and airports, manufacturing and medical research.
Trump also suggested, without providing specifics, that the fund could be used to keep TikTok operating in the US. TikTok is now operating due to an extension Trump granted prolonging the deadline for a forced sale or shutdown.
What is a sovereign wealth fund and why is Trump creating one now?
Designed to invest in the national interest, sovereign wealth funds are typically funded by countries rich in natural resources and it is unclear how a US fund would operate or be financed
www.theguardian.com
