Money Matters

While we are on the subject of election policies and money matters - there was an article in the Saturday edition of the Canberra Times quoting sources in the Independent Newspaper that may be a worry to those who are interested in financial matters:

Darling signals tougher stance on sovereign funds

By Danny Fortson

Published: 18 October 2007

The Government is to support calls for reforms of sovereign wealth funds, chancellor Alistair Darling indicated yesterday, marking a major departure from his previous laissez-faire attitude toward the state-controlled funds that have become aggressive buyers of UK companies.

SWFs, set up to invest excess state revenues from record oil and commodity prices and foreign exchange reserves, have grown to control $2.2trn (£1.1trn) around the world. Analysts are expecting this to rise by as much as six-fold over the next decade. Yet some of them, including the Abu Dhabi Investment Authority, the world's largest with an estimated $625bn to spend, are very opaque. Worries about their influence and motivations are growing in the UK, which has become a primary hunting ground. Nearly half of the London Stock Exchange is now owned by Dubai and Qatar. A fund backed by the SWF of the latter is close to launching a takeover of supermarket giant J Sainsbury.

I don't know about anyone else, but I for one am worried about this much money that is being invested in companies by sovereign sources.

Qatar, Dubai, Singapore, Saudi Arabia as examples, are countries that do not inspire any confidence when it comes to their stability and given the wealth that they own and are investing around the globe - it is moot as to what would happen should they suddenly have a radical change in their governments.

In combination with their wealth and what is happening at present in countries that also hold nuclear weapons like Russia, China, Iran and Pakistan and that also happen to have very large sovereign funds, it is not beyond the realm of possibility that if these countries destabilise then we may not have to wait for the effects of global warming to create some crises that become uncontrollable.