Accumulation of foreign reserves is not the outcome of national wealth.
Mandatory foreign exchange settlement and the formation of foreign exchange reserves, in essence, is the country's international credit collateral.
If, the state with a budget surplus to establish a sovereign wealth fund, that is the real sovereign wealth funds. Misappropriation of the International Credit sovereign wealth funds as collateral, it is very crazy and very dangerous act.
Economics is based on the philosophy; it must be based on sound and clear concept of economics and logic.
Why should Koreans set December 13, 1997 as National Humiliation Day? Because, when the collapse of the Korean national international credit, Koreans must transfer part of the economic sovereignty and the sovereignty of almost all the currency in order to avoid national bankruptcy. In the Korean view, this is the same day associated with the shame of national subjugation.
Credit does not equal to Wealth. Of course, investment bankers will tell you to follow the profit. My question is have they taken care of the risks for you in so-called surplus countries?
Credit is not wealth, G.D.P is not wealth. They cannot last as long as wealth, bear that in mind when you invest into these portfolios!
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