President Donald Trump announced plans to create a sovereign wealth fund during an Oval Office executive-order signing ceremony. Details on how the fund would work were not immediately available, but Treasury Secretary Scott Bessent outlined that it would be a combination of liquid assets and assets held in the United States. The fund could potentially be funded by the U.S. government’s business dealings with companies, such as buying Covid vaccines and receiving warrants or equity in return. Commerce Secretary Howard Lutnick and other officials would be involved in establishing the fund, which may take up to a year to do so.
Sovereign wealth funds, which exist in other countries like Norway, China, and Saudi Arabia, invest government revenues in assets like stocks. The largest fund in the world is in Norway, equivalent to approximately $325,000 per Norwegian citizen. Alaska and Texas also have state-run funds. However, a 2024 study cautioned that without proper safeguards, sovereign wealth funds could be used for corruption, money laundering, or other illicit activities.
Overall, Trump’s plan to create a sovereign wealth fund aims to generate funds that could be distributed to American citizens, potentially through various investments and business dealings. The fund’s establishment process and potential impacts on the economy and society remain to be seen.
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