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Usually a sovereign wealth fund is funded by excess profits, like Norway for example. In this case, it's being seeded by $25 billion dollars of debt. Can anyone

Usually a sovereign wealth fund is funded by excess profits, like Norway for example. In this case, it's being seeded by $25 billion dollars of debt. Can anyone more financially gifted explain how this is any different from, well, regular government spending and money printing?

WorkerBee28474 6mo ago
Only in that it's in a private equity fund, not one-time spending.
Tiktaalik 6mo ago
Yea really. Feels like a bit of a communications exercise and effort to create arms length distance from the Federal government and spending on major projects. Now it's not the Federal government and taxpayers propping up the oil industry by buying yet another oil pipeline, but rather a "sovereign wealth fund" (funded by Canadian taxpayers).
- slopinthebag 6mo ago
  Yeah and like, if they want to use it for infrastructure, mining, and LNG development, isn't that at odds with retail investors who require more liquidity? Doesn't it require the fund to either hold massive cash reserves to manage redemptions or rely on government bailouts if retail sentiment sours before projects mature? To me it sounds less like a "sovereign wealth fund" and more like a domestic infrastructure bank wrapped in populist messaging. I expect plenty of boomers to invest to "stick it to Trump", elbows up!
  - Tiktaalik 6mo ago
    And we already have an infrastructure bank! Trudeau started it. And Carney was the financial advisor to Trudeau, so it was probably his idea too! lol.
    - slopinthebag 6mo ago
      We do?!?!? Why don't we ever build any infrastructure with it lmao
      - I-M-S 6mo ago
        Probably because of NIMBYs
llm_nerd 6mo ago
>Usually a sovereign wealth fund is funded by excess profits, like Norway for example. If Canada ran resources like Norway does, it would have an enormous "excess profit". Norway's royalty rates and "profits" are dramatically higher than Canada where decades of American psyops fooled a bunch of very foolish people that the primary purpose of Canada is to ensure maximum profits for US orgs. But really, international economics is just mostly made up, and if enough people go along with it then it's as real as real can be.
- lotsofpulp 6mo ago
  >But really, international economics is just mostly made up, and if enough people go along with it then it's as real as real can be. What is not made up is that if you need to import things from other countries, then you need to export things from your country in proportional value, or else the country as a whole loses purchasing power (i.e. gets poorer). In this case, if Canada is increasing its money supply, then the purchasing power of the currency will go down unless it correspondingly increases demand for its currency (usually by increased demand for its goods and services, including land or businesses in Canada).
  - llm_nerd 6mo ago
    >What is not made up is that if you need to import things from other countries, then you need to export things from your country in proportional value, or else the country as a whole loses purchasing power (i.e. gets poorer). So the US is the world's poorest nation, by far, right? Country has a two trillion dollar+ deficit, a one trillion dollar trade deficit, absolutely no end in sight of spiralling to bankruptcy (it's only getting worse), and lets the money printer go brrrr. Most of international economics are made up, and often are nonsensical. There is no master book of records that dictates cause and effect (there simply isn't, so at best we get "but if you do this...that maybe will happen...or maybe it won't", but mostly it's people looking around and trying to figure out what other people will go along with.
    - lotsofpulp 6mo ago

WorkerBee28474 6mo ago

Only in that it's in a private equity fund, not one-time spending.

Tiktaalik 6mo ago

Yea really. Feels like a bit of a communications exercise and effort to create arms length distance from the Federal government and spending on major projects. Now it's not the Federal government and taxpayers propping up the oil industry by buying yet another oil pipeline, but rather a "sovereign wealth fund" (funded by Canadian taxpayers).

slopinthebag 6mo ago
Yeah and like, if they want to use it for infrastructure, mining, and LNG development, isn't that at odds with retail investors who require more liquidity? Doesn't it require the fund to either hold massive cash reserves to manage redemptions or rely on government bailouts if retail sentiment sours before projects mature? To me it sounds less like a "sovereign wealth fund" and more like a domestic infrastructure bank wrapped in populist messaging. I expect plenty of boomers to invest to "stick it to Trump", elbows up!
- Tiktaalik 6mo ago
  And we already have an infrastructure bank! Trudeau started it. And Carney was the financial advisor to Trudeau, so it was probably his idea too! lol.
  - slopinthebag 6mo ago
    We do?!?!? Why don't we ever build any infrastructure with it lmao
    - I-M-S 6mo ago
      Probably because of NIMBYs

llm_nerd 6mo ago

>Usually a sovereign wealth fund is funded by excess profits, like Norway for example. If Canada ran resources like Norway does, it would have an enormous "excess profit". Norway's royalty rates and "profits" are dramatically higher than Canada where decades of American psyops fooled a bunch of very foolish people that the primary purpose of Canada is to ensure maximum profits for US orgs. But really, international economics is just mostly made up, and if enough people go along with it then it's as real as real can be.

lotsofpulp 6mo ago
>But really, international economics is just mostly made up, and if enough people go along with it then it's as real as real can be. What is not made up is that if you need to import things from other countries, then you need to export things from your country in proportional value, or else the country as a whole loses purchasing power (i.e. gets poorer). In this case, if Canada is increasing its money supply, then the purchasing power of the currency will go down unless it correspondingly increases demand for its currency (usually by increased demand for its goods and services, including land or businesses in Canada).
- llm_nerd 6mo ago
  >What is not made up is that if you need to import things from other countries, then you need to export things from your country in proportional value, or else the country as a whole loses purchasing power (i.e. gets poorer). So the US is the world's poorest nation, by far, right? Country has a two trillion dollar+ deficit, a one trillion dollar trade deficit, absolutely no end in sight of spiralling to bankruptcy (it's only getting worse), and lets the money printer go brrrr. Most of international economics are made up, and often are nonsensical. There is no master book of records that dictates cause and effect (there simply isn't, so at best we get "but if you do this...that maybe will happen...or maybe it won't", but mostly it's people looking around and trying to figure out what other people will go along with.
  - lotsofpulp 6mo ago