US President Donald Trump has proposed a plan to set up an independent Wealth Fund (SWF) to the Treasury and Commerce departments for 90 days.
“We are going to create a lot of money for the fund,” Trump told reporters. “And I think it is time for this country to have an independent wealth fund.”
He also suggested that the fund could be used to buy trick.
“We are probably doing something with Techtok and maybe not,” Trump said. If we make the right deal, we will do it. Otherwise, we will not … we can put it into a wealth of wealth.
There is a look at what we know about Trump’s SWF project.
What is an independent wealth fund?
Governments own and use independent wealth funds to invest in global assets for long -term growth.
An SWF has been described as three elements in the official definition developed by the International Forum of Sourin Wealth Funds (IFSWF).
- The country’s government, including the federal and state governments, owns it.
- The fund includes investment in foreign financial assets.
- The fund invests in keeping with financial goals, such as infrastructure and economic development.
According to IFSWF, key elements of SWF do not include public pension funds, which are finally owned by those who are entitled to benefit from them, or to a country’s central bank with foreign currency Reserves, which are mainly used for monetary. Stability rather than investment.
An SWF can act as an investment account for the nation’s long -term benefit. A stability device, providing funds that can be prepared when the budget is needed. A development device to support economic policy; Or a collection of all three.
Finally, they are designed to become an egg of the nest, which can invest existing additional funds to benefit future generations. Countries that are rich in commodities traditionally use them to invest in profit from the sale of oil, natural gas, metals and minerals for the future. According to the IFSWF, natural resources income generate about 60 % of the funds.
Unlike pension funds, where people withdraw money as income to help themselves in retirement, it is believed that SWFS will have to invest in the collective good of a nation.
This may mean financing for the construction of the airport, school or infrastructure project. SWF often invests in financial products and buy stake in companies, which can provide long -term economic protection and fund public budgets or social programs.
Where will the money come from to establish a US fund?
Trump has been ambiguous or financed about the size of any US sovereign wealth fund.
The President’s Executive Order instructs the Trade and Treasury departments to include funding procedures, investment strategies, fundraising and planning recommendations for the governance model.
Treasury Secretary Scott Basant told reporters that the fund would be set up within the next 12 months, but it was not clear where the money would come from.
“We are going to monitor the assets of the American Balance Sheet for the American people,” Basant said. “Liquid assets will be a set of assets, assets we have in the country when we work to expel them for the American people “
The assets that the basant are referring to the Basant may include property and even government bitcoin holdings, said Stein Weiger, a senior fellow at the US Enterprise Institute.
According to the Crypto Firm 21CO analysis, the United States has involved at least 215,000 bit coins since 2020, which costs about $ 21 billion at current prices. Trump suggested last year that he could have a crypto reserve plans like oil reserves.
Weiger told Al Jazeera, “Bitcoin Holdings” can be the basis of an independent wealth fund, however, of course, his price is relatively modest “.
Which other countries have established SWF?
According to the IFSWF, more than 90 such funds manage more than $ 8 trillion worldwide.
The largest fund is the Norwegian Government Pension Fund Global, which has $ 1.74 trillion in assets, followed by the China Investment Corporation, which has a data provider, according to the Autonomous Wealth Fund Institute, 1.33 trillion assets.
The Institute said that Abu Dhabi, Kuwait, Saudi Arabia and Singapore are among other countries, including prominent independent wealth funds, including 801BN to 1.06 trillion.
Is SWF a good idea for the United States?
Trump is not the first to consider the establishment of the SWF for the United States.
According to the New York Times and the Financial Times, the former president, Joe Biden’s administration, was also considering setting up such a fund before Trump’s election in November.
And Trump praised the idea of ​​setting up a fund, saying it could fund “great national efforts” such as infrastructure projects such as highways and airports, manufacturing and medical research.
Some investors in Wall Street said the news was a surprise and asked if this was a good idea.
Generally, an SWF is provided with additional funds from a country. However, the United States has permanently runs budget deficits since 2001. It lost $ 1.8 trillion for 2024 in the financial year, which was 8 138bn – 8 % over the previous year. Congress approval will be required to set up an independent wealth fund.
“The creation of an independent wealth fund,” said Colin Graham, head of the multi -asset strategy in Robiko in London, shows that a country saves and can be allocated for it. ” “The economic rules of the thumb do not increase.”
“There is also a danger that the fund manager can invest in a bad investment with him,” said Viger from the US Enterprise Institute.
“The US SWF, unless there is no reason to think that it has not used its political power,” he said. “I don’t think it’s a good idea for America.”
SWFS is also being criticized. According to a report published by Carnegie Endowment for International Peace, many SWFs lack transparency, which has raised concerns about corruption and political interference.
Sovereign Funds Funds: Corruption and other governance risks report, “Without detailed financial and operational information, open door to misuse of investment income for non -civilized managers and political elites, open the door open. It’s left. “
He added, “Not only this reduction of transparency can make SWF a corrupt use. But at the economic level, it will fail the funds, mismanagement, or quickly withdraw funds from the target markets. In the case of real instability also requires the risks. ” .
Can SWF be used to buy trickyak?
Trump has suggested that the Wealth Fund can buy a trick, but there is no firm plan to do so. The company’s destiny in the United States has been uncertain from January 19, when a law that requires its Chinese owner, bitus, is to be sold or banned on the national security field.
After taking office on January 20, Trump signed an executive order that tried to delay the enforcement of the law for 75 days.
Trump has said he is talking to many people about the purchase of tickets and will likely decide on the future of the app this month. The popular app has about 170 million US users.
