In an attempt to find an explanation for the erratic policy of the Trump administration, people are pointing to the so-called “Mar-a-Lago Accord.” (This short explainer by Torsten Sløk offers one summary.) Although one could imagine that this policy mix is what some members of the White House want, we run into the classic “you can’t get there from here” problem.
I do not see the hypothetical US SWF as an instrument to manage the USD. I see it as a T**** family investment fund outside Congressional oversight. It is one thing to cut spending and another to lower income taxes (which T**** wasn’t paying anyway) but that doesn’t generate money to spend on vanity projects (like Mar-a-Gaza). That is the use of the SWF—a slush fund from federal receipts to be invested at the discretion of the executive (something that will surely be written into the authorizing legislation).
I was going by the Sløk piece, where the SWF is an instrument of lowering the value of USD. That’s probably the wishful thinking of the Mar-a-Lago plan fans - it would be a slush fund as you suggest. But buying USD assets with USD revenue does diddly squat for the currency value, so it doesn’t fit with the thesis.
The SWF would probably just be used as the 'BitCoin strategic reserve' to drive up the price of crypto, and thereby increase the wealth of T's major backers (the crypto cultists).
So the OZ SWF funds only that (the old civil servants’ DB scheme) and cannot, say, invest in crypto or in some energy racket (like the $ 1.4 B the US just dumped on “sustainable jet fuel” in Montana) ?
It can and does invest in all sorts of things - probably including crypto and energy companies. I’m not sure how the returns are actually remitted to the government or if they ever will be! The Future Fund just keeps getting bigger. The idea was that the money in the Fund would more than balance the government’s spending on the pension payments. Spending on one side of the ledger is offset by an increase in the government’s financial assets on the other side.
I do not see the hypothetical US SWF as an instrument to manage the USD. I see it as a T**** family investment fund outside Congressional oversight. It is one thing to cut spending and another to lower income taxes (which T**** wasn’t paying anyway) but that doesn’t generate money to spend on vanity projects (like Mar-a-Gaza). That is the use of the SWF—a slush fund from federal receipts to be invested at the discretion of the executive (something that will surely be written into the authorizing legislation).
I was going by the Sløk piece, where the SWF is an instrument of lowering the value of USD. That’s probably the wishful thinking of the Mar-a-Lago plan fans - it would be a slush fund as you suggest. But buying USD assets with USD revenue does diddly squat for the currency value, so it doesn’t fit with the thesis.
The SWF would probably just be used as the 'BitCoin strategic reserve' to drive up the price of crypto, and thereby increase the wealth of T's major backers (the crypto cultists).
SWFs are for small rich countries with surpluses that they have no place to invest domestically (Norway, Singapore, Gulf states).
And yet, Australia has one - notionally to 'fund' the pensions of civil servants on the old defined benefits schemes.
So the OZ SWF funds only that (the old civil servants’ DB scheme) and cannot, say, invest in crypto or in some energy racket (like the $ 1.4 B the US just dumped on “sustainable jet fuel” in Montana) ?
It can and does invest in all sorts of things - probably including crypto and energy companies. I’m not sure how the returns are actually remitted to the government or if they ever will be! The Future Fund just keeps getting bigger. The idea was that the money in the Fund would more than balance the government’s spending on the pension payments. Spending on one side of the ledger is offset by an increase in the government’s financial assets on the other side.