Editorial: Oil Funds In The Age Of The Global Casino Economy
"Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas."– Paul Samuelson (1915-2009)
News reaches us that The Government Pension Fund of Norway or Statens pensjonsfond may be inline for restructuring. Currently comprised of two arms which may be uncrossed in September, the Fund’s function is "to facilitate government savings to finance rising public pension expenditures, and support long-term considerations in the spending of government petroleum revenues." At an estimated value of $720 billion, it is the largest sovereign wealth fund in the world. By 2030 it is set to hit $1.3 trillion – around $265,000 for every Norwegian.
The sheer size of the Fund has made it political – it is roughly equal in size to the GDP of Saudi Arabia – and issues have arisen around the ethical aptness of its investments and whether its over-exposure to stock market is a risk too far for an ageing population with declining hydrocarbon yields.
37 of the world’s 69 sovereign wealth funds are based on finite reserves of oil and gas, declaring somewhere around $3.15 trillion of stored wealth from the giant funds of Norway and the United Arab Emirates to the nascent Ghana Petroleum Funds and the Fund for Future Generations in Equatorial Guinea. Putting it all on red might be the thrill of a lifetime, but watching paint dry and grass grow at least intimates you have a home to go back to….