On the rise of sovereign wealth funds, there are two sources of expert opinion that should be automatically discounted: government officials and bankers. No politician or bureaucrat is going to stand up and declare that government-controlled pools of cash -- the stuff that politicians and bureaucrats thrive on -- are a bad thing. All we need to do in the face of the rise of SWFs, they say, is impose a little more transparency and a few "commercial" rules. "They must maintain high standards of international integrity," Finance Minister Jim Flaherty said in a waffling speech earlier this week.
And certainly no bankers are going to shut their doors when some gazillion-asset wealth manager from the Kingdom of Kash comes looking for a place to park another batch of nationalized billions seized from citizens and corporations -- often through cartel operations --all over the world. If the Kuwait Investment Authority wants to deposit US$1-billion into the balance sheet of Citigroup, nobody at Citigroup is going to raise objections on the grounds that the KIA is a relic of forms of state control and confiscation that freedom-loving people fought wars and revolutions to overthrow. God bless the Kingdom of Kuwait!
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