China has the second largest sovereign wealth fund in the world at $1.3 trillion and it has over $16 trillion in debt.
Singapore also has both a large national debt and a large sovereign wealth fund.
The Federal Reserve holds about $4.4 trillion in T-bills and bonds. The US already holds a lot of financial instruments just not equities.
As of January 3, 2024, the Federal reserve balance sheet totaled approximately $7.7 trillion, with Treasury securities and MBS making up the majority of its assets
UAE Sovereign Wealth Funds
Combined assets: $1.624 trillion (Dh5.9 trillion) as of end-20213
Mubadala (one of UAE’s three main wealth funds):
Deployed $29.2 billion in investments in 20246
Focus areas: Artificial intelligence, private credit, healthcare
Saudi Arabia’s Public Investment Fund (PIF)
Investment spending: $19.9 billion in 2024 (down 37% from $31.6 billion in 2023)
Focus: Investments inside Saudi Arabia
Norway’s Government Pension Fund Global (GPFG)
Total value: 19.7 trillion kroner ($1.75 trillion) as of end-202414
Investments:
Equity investments (70% of portfolio)
Fixed income investments
Unlisted real estate
Renewable energy infrastructure
Notable holdings: Stakes in over 8,000 companies across 63 countries, including Apple, Microsoft, Nvidia, and Amazon
Indirect Bitcoin exposure: $356.7 million (3,821 BTC) as of end-2024.
If the sovereign wealth fund grows at 6.5% (returns achieved by Norways fund) and the national debt was at 3.5% then every 18 years or so the sovereign wealth fund would double relative to the national debt if there were balanced budgets.
Sovereign Wealth Fund (SWF):
Initial value in 2030: $5 trillion
Annual growth rate: 7.5%
National Debt:
Initial value in 2030: $40 trillion
Annual growth rate: 3.5%
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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Hearing nays, nays and nays. The idea is perfectly fine. Actually one of the better things this admin will implement. Usa has high debt, debt payments are huge, it is getting worse. The current way of doing things let to it. Complain and do nothing? Nah. What else to do? Increase taxes? Yes put the strain on the economy, like there is not enough problems for ordinary Joe,.. Reduce the taxes? Debt or budged deficit wont go away with that. Make cuts to reduce gov spending – They are doing that, but that wont be enough. Like Musk or not, he knows how to run companies even if the difference is tiny, he will do it. From the options that are on the table this is no brainer, even if profit is only a few percent it is still profit, and less debt, way that gov makes some extra positive profit.
Of course, this requires that the federal government invest on sound economic principles to maximize return, rather than on politically driven principles to maximize money laundering. I’m not sure our government is actually capable of that, as a practical matter.
We sort of experimented with this, having the SS trust fund accumulate a very large surplus, which was entirely invested in federal bonds. That didn’t work out great.
It’s my position that a sovereign wealth fund for the US is basically useless until we have some control over borrowing, because it’s very existence will drive more borrowing.
Musk probably gave it a go and it is logical. Like any business if risk is low, chances are good that interest on loan are less than profit made. Fund will most likely make more than interests and pumping money into economy will give other passive benefits.