Sovereign wealth funds are reshaping ownership of commerce in the world.  The opposite of privatization.  Foreign governments have huge slush funds, overwhelming hedge funds.  China does it with a multi-faceted policy of generating huge exports with currency manipulation, taxes and vast subsidies to its industry.  The Middle East does it with oil.

The U.S. trade policy funds our geopolitical rival... China.  U.S. energy dependency funds our other geopolitical rivals - the oil dictators.  Our Founding Fathers would be pleased.

This from the Washington Post:

Those markets are producing what one economist calls the "greatest wealth transfer the world has ever known." In a single year, the revenue of oil- and natural gas-producing Persian Gulf states have nearly doubled -- giving nations in the region hundreds of billions of surplus dollars to play with. Recent Saudi promises to increase oil production may help ease prices. It is also the profitable accommodation of an addiction.

How much money are we talking about? Because the Gulf monarchies are extravagantly secretive, the estimates vary. The Saudi Arabian Monetary Agency declares official reserves exceeding $300 billion, but the real number is probably much larger. And this does not include the wealth of individual royals. Brad Setser, my colleague at the Council on Foreign Relations, estimates that Middle Eastern sovereign wealth funds have perhaps $1.5 trillion set aside for a rainy day.

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