November 2, 2007
The federal government will soon face a very ticklish question. How to handle the effect of "sovereign-wealth" funds (government based hedge funds) on the United States trading markets. With up to $2 trillion to invest, and estimates of up to $10 trillion in ten years, the funds could dominate our trading system. Government based motives could trump profit motive at the discretion of the sovereign funds and roil the markets. What to do? Force more disclosure on the sovereign funds that we do no private funds?? This problem will test our international negotiators. In any event, the next post should warn our lawmakers.
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