Sovereign wealth funds exist to invest a nation’s foreign currency holdings from running trade surpluses. The U.S. has a net negative foreign reserve balance, with U.S. dollars held abroad, as a function of its reserve currency status.
It’s just financially incoherent. Either you possess a reserve currency (which other countries hold) OR you have a sovereign wealth fund (to invest currencies issued by other countries). Not both.
Now, some countries do have government funds like pension funds, and so do we, but that’s different from a “sovereign wealth fund” to invest reserve holdings
Now, as some of you have noted, what this may really be about is investing US dollars into other instruments, such as Bitcoin and Trumpcoin. That’s not a “sovereign wealth fund”, that’s just the U.S. government taking a punt in crypto markets.
It’s another form of corruption hiding in the clock of legitimacy.
By way of Patrick Chovanec - Economist