
Norway’s Sovereign Wealth Fund Is the Size of the Mexico's Entire Economy - Four_Star
http://thesoundingline.com/norways-sovereign-wealth-fund-size-entire-mexican-economy/
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ucaetano
This is a stupid comparison. It is comparing flow vs. storage. This is
comparing Joules to Watts. It isn't even wrong.

The Mexican economy generates $1 trillion of value per year.

The Norway Sovereign Wealth fund has $1 trillion in capital.

Over the past 2 years, it seems that Norway's fund generated an average return
of about 10% a year.

That means Norway's fund is "equivalent" to a $100 billion GDP country, about
1/10th of Mexico.

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digi_owl
Sadly this stock/flow confusion is rampant in economic thinking...

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tlb
Why do people keep comparing assets ($) to GDP ($/year)?

If you want to compare the two, 1 year isn't a reasonable term. You can
convert a rate into a current asset value by multiplying by a P/E ratio,
anywhere from 10 to 20 these days.

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cperciva
News media love to do this on a personal level too. Every month CBC runs a
story about how Canadians' household debt (mostly mortgages) is 170% of their
disposable income.

It isn't completely meaningless to compare these, but the units need to be
right: Rather than "170%" (which scares people because it's more than 100%!)
we should say that household debt is equal to 20 months of disposable income.

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mistermann
But that is the same thing, which isn't the case in the article.

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Basketb926
Norway's Sovereign Wealth Fund has as much capital stock as the total flow of
Mexico's Entire Economy. Obviously Mexico has a heck of a lot more capital
stock which is required to create such a large economic flow.

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sct202
This is kind of a bad comparison to make since they're comparing the value of
Norway's fund versus the output of Mexico's economy (which would be more like
revenue in the context of a company/investment).

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dopamean
These types comparisons are made all the time make no sense.

ITT Edit... lots of people complaining about the comparison (like me).

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jimnotgym
And the UK spent its oil wealth on tax cuts...now the oil has gone and retired
people are richer. Woop

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digi_owl
The current Norwegian Government is doing pretty much the same...

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clarkmoody
The capital stock of Mexico is estimated at $6.5T (2011 dollars, 2014
estimate)[1]. This is probably a better point of comparison.

[1]:
[https://fred.stlouisfed.org/series/RKNANPMXA666NRUG](https://fred.stlouisfed.org/series/RKNANPMXA666NRUG)

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loeber
This compares stocks to flows, which is incorrect and useless. Article
dismissed.

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ceejayoz
I find this stat far more fascinating:

> $190,000 for every one of Norway’s 5.2 million citizens

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HillaryBriss
yes. very interesting. it turns out that Norway is very unusual, on a per
capita basis, among governments that have such funds:

[https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Largest_...](https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Largest_sovereign_wealth_funds)

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barkingcat
The 4 China related/controlled funds add up to over 2 Trillion.

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ceejayoz
They've got 265x the population, though.

