Can a US sovereign wealth fund save Tiktok?

President Donald Trump signed a senior lawsuit on Monday. It seeks to establish a sovereign wealth fund in the United States, a non-orthodox move in the country that has a national debt base. Wealth Funds, investment strategies and financial performance around the world.

Among other uses of such funds, Trump suggested that it could be a means to purchase Tiktok.

What is a Sovereign Wealth Fund?

A sovereign wealth fund is a government-owned investment fund and is usually managed by a central bank. Sovereign wealth funds usually rely on revenues from natural resources, primarily oil, but also from metals and minerals, Aguilera says.

There are hundreds of such funds run by governments around the world, some date back decades. Financial products aimed at “rainy days” enable sovereign wealth funds and allow states to utilize surplus income for investment in national initiatives and other projects, Aguilera says.

“These are usually countries with a lot of liquidity, meaning they have a lot of cash on hand,” she says.

Why are sovereign funds in hard cells?

However, despite bipartisan support for investment vehicles (Joe Biden was also considering the possibility of launching a sovereign wealth fund during his time in office), the economics of US sovereign wealth funds are the ones that have been the case for nationals. It could be a huge selling point as a debt teaser. It will make $36 trillion politically miserable.

“We see these at the state level, often sourced from oil,” continues Aguilera. “The big question associated with the federal government is where does liquidity come from?”

One possibility that Trump has floated is converting the US international development finance company into an organ that can act like a sovereign wealth fund. Shuffling of funds from various federal agencies may require approval from Congress.

Another funding strategy emerged by the Trump administration is to raise private funds or government ownership from large corporations.

Components of a prosperous fund

A key element associated with successful funding is that it shows “good corporate governance,” with strong checks and balances, and is independent of politics, says Aguilera.

“Sovereign wealth funds should be resilient in the political cycle as they aim for stable, long-term investments,” Aguilera says. “This has something to do with me regarding the creation of a sovereign wealth fund in the United States.

“It’s not a pension fund, not a state-owned enterprise, it’s not like a Treasury bond. It’s a tool for central banks to invest discretionary funds and excess cash.”

Some examples of successful models

Norwegian Sovereign Wealth Fund, Norwegian Government Pension Fund, boasts a valuation of $1.7 trillion, the world’s largest.

“It’s very transparent and profitable,” Aguilera says. “They have a clear delegation to their investment strategy and know when they need to rebalance.”

Oil-rich countries such as Saudi Arabia, the United Arab Emirates and Kuwait own well-known portfolios. Funds from other countries, such as China and Singapore, are mixed with government-owned assets.

“The only situation where the US can have a national fund is when there are private investors who want to support the development of the country,” Aguilera says. “But I don’t think that’s a good idea if this is just an addition to the national debt.”

What does US funding look like?

Aguilera operates as a “strategic” fund to help the administration develop policies, similar to how Turkish sovereign wealth funds work. It is unknown exactly what structure can be done.

According to CNBC, “We will make this in the next 12 months. “The combination of liquid assets, the assets we have in this country, will take them for Americans.” I work for it.”

Regarding the question of whether the fund can resolve the Tiktok ownership issue, Aguilera adds, “I doubt that, but time will say it.”

This story has been republished courtesy of Northeastern Global News news.northeastern.edu.