President Trump on Monday signed a new executive order, directing the Secretary of the Treasury and Secretary of Commerce to create a Sovereign Wealth Fund, a government-owned investment fund.
“This charges your secretary of the Treasury, Scott Bessent, and your Secretary of Commerce, Howard Lutnick, to begin a process that will hopefully result in the creation of an American Sovereign Wealth Fund,” said the President’s staff secretary, Will Scharf, while presenting the order to be signed.
“It’s a very exciting event. We’re going to have a Sovereign Wealth Fund, which we’ve never had. We have a lot of things that create wealth, and you’re seeing that over the last two weeks; I think we’ve created more wealth,” President Trump said before signing the order. “Other people have created de-wealth, the people, my predecessors. We’re creating a lot of wealth.”
Treasury Secretary Scott Bessent agreed that the new order is “very exciting” and added, “We’re going to stand this thing up within the next twelve months.”
“We are going to monetize the asset side of the U.S. balance sheet for the American people; we’re going to put the assets to work,” Bessent said. “We’re going to study best practices as done around the world. It’ll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people.”
The President’s Commerce Secretary Nominee, Howard Lutnick, was also present at the signing. “The extraordinary size and scale of the U.S. government and the business it does with companies should create value for American citizens,” Lutnick stated. “If we are going to buy 2 million COVID vaccines, maybe we should have some warrants and some equity in these companies and have that grow for the help of the American people.”
He added, “Bringing all these things together, I think, will create– Scott and I will create an amazing Sovereign Wealth Fund for you, sir.”
President Trump also spoke about “doing something, perhaps, with TikTok” and suggested that the U.S.’s equity in the company will be put into the U.S. Sovereign Wealth Fund. “We’re going to create a lot of wealth for the fund, and I think it’s about time this country had a sovereign wealth fund.”
WATCH:
Per CBS:
Sovereign wealth funds generally use a nation’s reserves and invest the funds to generate returns, which can be used to address deficits, pay down debts or bolster savings. It’s unclear what types of safeguards would be placed around a U.S.-owned investment fund to ensure it has transparent reporting obligations and that the investments aren’t benefiting political allies.
Other countries that have a sovereign wealth fund include China, Singapore, New Zealand, Norway and Saudi Arabia, among others.
Norway’s sovereign wealth fund, the Government Pension Fund of Norway, is the largest in the world, with assets valued at $1.7 trillion, a substantial figure for a country of 5.5 million people. The Norwegian government is only permitted to spend a small part of the fund each year, but the total amounts to nearly 20% of its annual budget.
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