SWFs vs Free Trade

Matt Cooper says that sovereign wealth funds are "the opposite of free trade" and "anathema to a free-market economy". I don’t see why that should be the case: if anything, the funds are a natural consequence of free trade.
If the US does a lot of free trade with some entity and runs a trade deficit with that entity, the entity in question will end up with a lot of dollars, and ultimately those dollars will be used to finance the US current-account deficit by investing in US stocks and bonds. Does it make any difference whether that entity is a corporation or a country? Not as far as the macroeconomics are concerned, although admittedly the politics are another matter.
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Original Source: www.portfolio.com

  31 Julio, 2008| Economy | @ 16:28

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