Global Insight, Greed, Inequity, Sovereign Wealth Funds, The Lethargy of our Political leaders, When Money Talks
There can never be power, of a political or economic nature, without responsibility.
WHILE OUR WORLD LEADERS AND OUR WORLD ORGANISATIONS ARE PREOCCUPIED WITH GROWING THE ECONOMY TO THE DETRIMENT OF OUR PLANET AND EQUALITY THE POWER OF MONEY HAS ANOTHER ALLIE SOVEREIGNTY WEALTH FUNDS.
When Money Talks, undue financial power is affecting their policies.
We are all abhorred by the rise of ISIS, the pending disaster of Climate Change, the spread of Ebola and the current conflicts in the world but if we are not vigilant we are all going to end up living in a Privatized World – Called World Corporate Inc.
I think that where ever there is money there is power. A critical point that we are all ignoring at our peril. This is why it’s necessary to put the lime light once more on Sovereign Wealth Funds. ( See Previous Posts)
Now I don’t believe sovereign wealth funds will tilt the balance of power in the near future. However someone must put them in their proper context, because the forces that give rise to sovereign wealth funds are in fact already beginning to influence the balance of power in a global.
With all that is going on in the world you might think that this is a storm in a tea-cup, but Inequity and Greed are the two elements that contribute the most to the Worlds problems.
At the moment there is SWFS designed to affect trans-generational wealth transfers, and those designed to enable economic stability as a result of changes in global production forces, are resource-based funds designed to transform physical wealth into financial wealth.
Historically, political power was created by military power.
Now the question is, instead of armaments, if I’m bringing investable dollars, does that actually play the role that nuclear warheads used to play in an earlier geopolitical era?
Global economic forces are tilting or, as I like to say, reorienting – and the pun is absolutely intended – the balance of power.
What we are seeing is a conscious effort to leverage shifts in capital flows and momentum for economic development into a degree of political power globally, whether they are in the form of blocks or even as individual entities.
The immensity of these foreign exchange reserves exceeds the typical buffer that a country requires, thereby enabling these rich states to make strategic foreign investments buying critical foreign assets, resources, energy, land, air and water.
The top 400 of these “global public investors” hold about $29 trillion in assets—equal to about 40 percent of the world’s gross domestic product.
State sovereign wealth funds from China to Africa are reshaping the global economy and at their current growth rate will surpass current U.S. economic output by 2015.
By 2016, analyst group Global Insight said the funds, which grew 24 percent a year in the last three years, would outstrip the current output of the European Union.
The Lethargy of our Political leaders is allowing Sovereign wealth funds (being non-transparent) to invest globally for political or strategic purposes. They are supported them by pushing Privatizations of public assets.
Example: The New proposed Nuclear Plant in the UK to be built by the EDF is 40% financed by a Chines SWF against guaranteed. EDF will receive a guaranteed power price of 92.50 pounds per megawatt-hour for 35 years, more than twice the current market rate, once the plant begins operations in 2023. The Hinkley Point C project has been agreed between the UK Government and French company EDF Energy and its two Chinese partners – China National Nuclear Corporation and China General Nuclear Power Corporation. The decision could lead to China taking a future majority stake – and even be allowed to own up to 100 pc – in the development of the next generation of British nuclear power. And England wants out of the EEC. Immigration comes in many forms. If your English have a look at what else SWFs own in your back yard you will be surprised.
The lack any enforcement mechanism to monitor these funds is lunacy. In spite of the fact they have been around for years, so much remains to be understood about their processes and activities. Companies should consider contractual provisions requiring disclosure of the SWF’s policy purposes, governance framework, financial statements, general voting approaches for risk management and legal relationship with other state bodies.
We should be concern that as government-operated investment funds, politically captured, used to distribute patronage and undermined by corruption the ongoing transformation in the global balance of power over the past and the future decades is going to end up
Accepting money from an SWF comes with some risk—at least on the surface.
THE current shift of financial power from multi-national organisations such as the World Bank to be used to effect none-financial outcomes.
China: Never in world history has one government had so much control over so much wealth. China’s overall trade surplus has enabled it to run up the world’s largest current account surplus (US$213.8 billion) and amass foreign exchange reserves of US$3.3 trillion. China holds one-fifth of all foreign-owned US Treasury securities.
Norway : Commonly known as the oil fund, Norway’s sovereign wealth fund invests the revenues from the offshore petroleum sector in foreign shares, bonds and properties in order to spread the wealth across generations.
The fund’s value could hit almost 6 trillion Norwegian crowns ($973 billion) by the end of the year.
With economic power comes political power. The motives of SWFs will be guided by the interests of the state rather than those of international business community.
You might wonder why we never hear much discussion by our world economic gurus on SWFS. Acquiring that information is difficult, however, since hugely rich entities mostly accountable only to their national governments. You tell me.
SWFs are well known for their opaque, tightly-guarded investment decisions.
They all have one thing in common they will ensure that the rich stay rich and the poor stay poor.