First try to understand the mechanisms that allowed the development of such funds. The emergence of SWFs result of macroeconomic imbalances that we have created. The trade surplus generated by some emerging economies, coupled with large inflows of capital on their soil, have enabled these countries to accumulate huge reserves exchange. We observed this phenomenon from China to Qatar via Russia.

Conversely, the trade balance of the vast majority of European countries and the United States has become increasingly negative. By consuming more and more, these countries are in debt. Would also increase spending by states and growing budget deficits. (more...)