What is a Sovereign Wealth Fund? (Uncut) 02-23-2025

What is a Sovereign Wealth Fund?

A lot of you asked about the Sovereign Wealth Fund and, you know, why we would do it and what it would do and all of that. So that’s what we’re going to talk about today. Let’s just dive right in.

Here you go, a plan for establishing a United States Sovereign Wealth Fund. And what is a Sovereign Wealth Fund? That are government-owned investment vehicles managing financial assets. So those are really mostly intangible assets.

We’ll talk more about that in a second. The economic rules of thumb don’t add up, though, so some of the naysayers. Creating a Sovereign Wealth Fund suggests that a country has savings and that it will go up and can be allocated to this.

So in other words, they run a surplus. But do we run a surplus here in the U.S.? No. As the world reserve currency, we’re almost forced into running debts and deficits.

But as you can see, keeping in mind that these gray bars are official recessions, you can see that from the beginning, every time, and this, by the way, is total public debt, every time we hit a gray bar, the speed at which we grow the debt has escalated. And this is 2020. And you can see where we are from there.

And in fact, currently, we are sitting at roughly $36.5 trillion worth of debt, just in the total public debt. There’s so much more that is hidden that it’s ridiculous. But OK, here you can see it for yourself.

And there are things that are going on that you need to be aware of, which I’m going to talk about in a second. This is the federal surplus, which happened over here, and that was just an accounting trick, wasn’t a reality, to deficits. And this is just through October of 2024.

So those are going to escalate. But what we’re looking at for the full year of 2024 is a minus $1.8 trillion. So where are the savings that countries normally use to create these sovereign wealth funds? They’re not there.

Not only that, but we postponed the debt ceiling fight. That’s coming up again. And right now, what we’re seeing between the Trump administration and Democrats or Republicans and Democrats, there is a big potential battle looming.

And we cannot know at this moment whether or not they’re going to raise the debt ceiling, or whether the Democrats will use that as a weapon against what President Trump is trying to do. So that is looming large. But the point is that I want you to understand is we don’t have any excess savings.

So you got to ask where that money is going to come from, potentially tariffs, or potentially just creating more? I don’t know. But we’ve got a lot more debt that we’re issuing. There is no savings.

So I’m not really sure where the funding for that will be. But we’ll find out, I’m sure. And in the meantime, what do governments typically do with the money that they have in their sovereign wealth funds? Well, most of it goes into equities, private equity investments, and sustainable energy projects, which quite frankly, those have been dismantled here in the US.

So I guess they can just focus on equities, private equities, public equities. And could this be a tool to keep this whole game going? It’s just a thought. But I want you to think about what is the purpose of it, since we don’t have savings to use? How are we going to create that? It’s time to build your position if you haven’t, if you’ve already started your sound money strategy, it’s time to get that done.