Oct 19 2007
Sovereign Wealth Funds: A Threat?
Dude has a simple but important observation on SIVs and Sovereign Wealth Funds, over at “Dude… Where’s my Dharma?” SWFs are the recently popular response for foreign nations to diversify their massive U.S. dollar denominated reserves, which continue to build in response to the U.S. propensity to spend and not save (e.g. the gargantuan twin U.S. deficits). Is this a real threat? Check out the link.
Also, for a better understanding of the dynamics that enable the massive deficits and create terrible, depression-threatening dislocations between nations, consider reading PIMCO’s recent white paper on the subject:
While we don’t fully agree with all their conclusions, their piece is definitely excellent food for thought!
