By Catherine Austin Fitts
Global sovereign wealth funds – state-owned investment funds investing in real and financial assets – have now surpassed over $6 trillion of assets under management. Originally created to manage the large surpluses created by natural resource extraction and to protect sovereign economies dependent on volatile commodity revenues and industries, they have become critical players in the re-balancing of the global economy and long-term investment.
Christopher Balding, associate professor in the School of Business at Peking University, has written Sovereign Wealth Funds: The New Intersection of Money & Politics. His book provides a history and overview of sovereign wealth funds and includes several case studies. It delves into the important policy issues which the governors and managers of sovereign wealth funds now face.
Balding points out:
“The SWF story is just beginning. The oldest funds are only fifty years old, and most are under ten. Many funds have years of productive capital accumulation from commodity revenue ahead of them before needing to subsist on interest from the hundreds of billions in the bank.”
Needless to say, we all have a vested interest in seeing the savings generated from the depletion of our natural resources invested wisely.