Trump orders the creation of a sovereign wealth fund

On February 3rd local time, US President Trump signed an executive order instructing government officials to establish a sovereign wealth fund. The specific details of how the fund will operate and be financed are still unclear.

When announcing the move at the White House that day, Trump said that the United States has "huge potential" and has appointed Treasury Secretary Scott Bessant and Commerce Secretary nominee Howard Lutnick to lead the establishment of the sovereign wealth fund.

During the campaign, Trump proposed to emulate the sovereign wealth fund model of countries such as Norway and Saudi Arabia to convert national resources (such as energy revenue) into long-term investment capital.

Bessant noted that the sovereign wealth fund will be established within the next 12 months and called it an issue of "great strategic significance."

The text of the executive order signed by Trump has not yet been made public, and it is unclear where the fund's funds will come from. Trump has promised to establish "the world's largest sovereign wealth fund."

Trump first proposed the idea last September in a speech at the Economic Club of New York, which would funnel tariff revenue into a sovereign wealth fund to invest in manufacturing hubs, defense and medical research.

"We will create America's own sovereign wealth fund and benefit all Americans," Trump said at the time. He then mentioned that Wall Street and business leaders could play a role in helping "provide investment advice."

Sovereign wealth funds are typically found in countries with large foreign exchange reserves or commodity revenues, such as Norway and Saudi Arabia, and invest in everything from stocks and bonds to infrastructure and technology.

The world's largest sovereign wealth fund is the Norwegian Government Pension Fund (about $1.8 trillion). If Trump wants to surpass it, he will need at least $1 trillion in initial capital. However, the United States lacks stable natural resource income like Norway, so it is almost impossible to achieve in the short term.

In reality, the United States does not have a federal sovereign wealth fund, but 20 states have similar funds, which are funded by energy or land revenues, such as the Alaska Permanent Fund and the North Dakota Heritage Fund. If Trump's proposal is realized, it will be the first attempt by the United States to establish a national sovereign wealth fund.

It is worth noting that some people speculate that the sovereign wealth fund is prepared to build up Bitcoin reserves, and some analysts believe that Trump will use these funds to buy Greenland .