Contrary to what the Fox News rodeo clown said this morning, the United States does not have a sovereign fund. Sovereign funds are very important, but you need to understand them before you start ringing every alarm bell in your brain.
That’s a pretty clear definition, and these people would know. One of the main reasons the United States doesn’t have a Sovereign Fund is you need to have a trade surplus to have one.
Most of the sovereign funds are run by oil exporting countries. They park the dollars from oil sales in the government owned funds and then the fund buys stocks, real estate, etc… To hold that wealth for the future.
You might think the Federal Reserve is our sovereign fund, but all it does is create dollars… Taking those dollars and going around the world buying up stuff is not what the Federal Reserve does. You might make the case that Goldman Sachs does that using Fed dollars, but those are backed by debt, not by assets.
But, Art … we DO have a trade surplus. Only it’s not ours.