The Great American Sovereign Wealth Machine

By Brad Thomas, Editor, Wide Moat Daily

According to President Donald Trump, America is about to get its very own sovereign wealth fund ("SWF").

You probably missed the news on Monday with all the tariff drama that went down – and got resolved very quickly exactly as predicted. Yes, China is still holding out; but as I argued yesterday, it's hardly in a great negotiating position right now.

In the meantime, there are plenty of other big stories to address. Like how President Trump signed an executive order to establish a sovereign wealth fund in order to "create value for American citizens."

SWFs are largely meant as investment accounts to enhance specific aspects of the local economy or the economy in general. To quote Reuters, they're "designed to be a nest egg, allowing current money to be deployed in a way that benefits future generations."

And as Treasury Secretary Scott Bessent told reporters on Monday, The Great American Sovereign Wealth Fund plans to monetize assets currently owned by the U.S. government "for the American people."

More about that shortly...

Admittedly, an SWF would be new for the U.S. government. But it's not a new concept for governments in general. China, Norway, and Saudi Arabia all have them, to list just a few countries. So do states like Alaska, Idaho, Texas, and Wisconsin.

All told, according to the International Forum of Sovereign Wealth Funds ("IFSWF"), there are over 90 sovereign wealth funds with over $8 trillion in managed assets that represent around 10% of global GDP.

These investment vehicles are clearly a powerful tool to unlock and grow wealth. So why hasn't the U.S. utilized them before?

The answer is undoubtedly complex. But an overarching reason is how large this country is with so many national and international concerns. It's easy to get so caught up in all the problems that you miss the solution.

Until, that is, a businessman like Donald Trump steps into the traditional politician role of president of the United States.

What to Know About the Great American Sovereign Wealth Fund

Now, I do need to state that a sovereign wealth fund will likely require congressional approval. While Trump signed an official executive order about it, I wouldn't be surprised if there's legal pushback that first needs to be resolved.

But what a win it would be for America if this SWF is implemented in the end!

According to a recent opinion piece for The Washington Times by Stephen Moore, "The federal government owns multiple trillions of dollars of federal assets, from land to buildings to patent rights to mineral rights to immigrant visas to oil fields to trucks and trains and unused office furniture equipment."

He claims "the government could earn well more than $1 trillion and perhaps as much as $10 trillion by selling off assets that are simply hoarded (figuratively) in the dark and dusty basements of government buildings."

Interesting, right?

Also consider how the federal government owns or leases over 8,000 properties and around 500 historic buildings. Some of those are empty, have been empty, and have no current plans to be non-empty. Others are unnecessary: the product of a bloated federal bureaucracy.

With the U.S. office market allegedly about to rebound – as I wrote about on Monday – now could be the perfect time to start making actual money off these properties. Especially in a sovereign wealth fund, which often owes some of its success to real estate.

Global real estate investment trust ("REIT") advocate Nareit wrote about this last November. Citing the Cornell University/Hodes Weill 2024 Allocations Monitor report, it noted how "all institution types invest in REITs, including more than 70% of sovereign wealth funds... and government entities."

In which case, it's a darn good thing that Trump is a real estate guru.

(He owns properties with New York City-based Vornado Realty (VNO) and has borrowed funds from commercial mortgage REIT Ladder Capital.)

He's long since recognized that an excellent way to unlock value is to turn non-income-producing assets into income-generating ones. I've seen him execute the idea successfully time and time again throughout his real estate career.

The Biggest Sovereign Wealth Fund in the World?

In my book, The Trump Factor, I explain how Trump "completely rebuilt and modernized the building" now known as the Grand Hyatt New York in 1980. Sixteen years later, he sold his interest to Hyatt for around $142 million.

And just before his 2016 presidential victory, he took control of an old decaying post office in Washington D.C. built in 1899 and located between the White House and the U.S. Capitol, Trump transformed the building into a five-star hotel that sold for $375 million in 2022.

So it's no surprise that he wants to make real estate part of his Great American Sovereign Wealth Fund.

This approach also fits in perfectly with Elon Musk's Department of Government Efficiency ("DOGE") mandate. As we're seeing with the possible shuttering of the entire United States Agency for International Development ("USAID") department – an alleged black ops facilitator that's acted against its own citizens as well as outside governments and groups – the federal government is being culled.

USAID alone employs over 10,000 people (that we know of), which means there could soon be some significant real estate vacancies... with significant money to be made for the American people.

In fact, after everything is said and done, the Great American Sovereign Wealth Fund could become the world's largest SWF. By far.

Of course, even Trump can't leverage every single government building. But keep in mind real estate isn't the only asset he can tap into. There are also assets like Bitcoin and TikTok out there, the latter of which Trump flat-out mentioned at the executive order signing.

Remember how he said last month that the app is "worthless" unless he approves it, in which case "it's worth maybe a trillion dollars." And if it's worth a trillion dollars, "then I think we should get half." I wrote about that in detail on January 22.

Considering his negotiating wins with Colombia, Mexico, and now Canada – not to mention how much China would lose if America did back out of TikTok – I think there's a very good chance we can add the social media platform to Trump's new SWF holdings.

There's a whole lot of winning to be had if the Great American Sovereign Wealth Fund goes through. And I, for one, can't wait to see it succeed.

Regards,

Brad Thomas
Editor, Wide Moat Daily

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