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  • Norway fund vs AHSTF

    'this year real estate" - So nice and contrarian of them! And the Austrian comments are very interesting. Dr. Martin Parkinson like an Alberta politician in the 1980s.

    Since Albertans generally voted to spend rather than save, and now with perfect hindsight, should Alberta have done anything different with the Heritage Savings Trust Fund?



    "...the nation’s $560 billion sovereign wealth fund,..."

    "Norway, a nation of 4.9 million people, generates money for the fund from taxes on oil and gas, ownership of petroleum fields and dividends from its 67 percent stake in Statoil ASA (STL), the country’s largest energy company. "
    "Norway’s oil fund got its first capital infusion in 1996 and has been taking on more risk as it expands globally, raising its stock portfolio to 60 percent from 40 percent in 2007. It first added stocks in 1998, emerging markets in 2000 and this year real estate to boost returns and safeguard wealth."

    http://www.bloomberg.com/news/2011-1...r-on-efsf.html



    Norway Oil Fund Should Buy Europe Assets in Slump, Adviser Says

    "While it bought “significant” amount of European stocks in the third quarter,"

    http://www.bloomberg.com/news/2011-1...iser-says.html


    Treasury chief wary of wealth fund zeal

    "AUSTRALIA's Treasury chief has urged caution on the increasingly popular concept of a national sovereign wealth fund, questioning whether it would be the best way to achieve its mooted aims."

    "Dr Parkinson also said Australia's focus should be on delivering surpluses and reducing net debt - rather than ''getting ourselves all hung up on whether we do it by reducing gross debt on issue, or maintaining gross debt and building up financial assets in a sovereign wealth fund''. "

    http://www.smh.com.au/business/treas...109-1n7ds.html

  • #2
    I don't think Alberta could get away with saving more than we do...

    not without Ottawa garnishing it and distributing that wealth to other provinces at some point, anyway.

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    • #3
      ^X2, Norway was smart enough to stay out of the EU (otherwise, the Greeks/Italians/Portugese, etc., would have spent most of those savings by now, just like the Quebec mafia does for Alberta). Also keep in mind that Norway is one of the most in-debt nations on earth ($131k per capita, versus 30k per capita for Canada). We might not have the savings in Alberta, but we don't have the debt either, its easy to save lots, when you borrow lots. That borrowing to save, doesn't look quite as smart right now in this economy, while there might be some bargains out there, there are plenty of duds too. While the Norweigian goverment likes to gamble with its citizens debt, I personally don't trust our politicians or investment advisors enough to want the same.
      Last edited by moahunter; 09-11-2011, 08:22 AM.

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      • #4
        Also worth noting, Norwegians pay higher income taxes and a value-added tax.

        If Alberta were to direct all its resource dollars into the Heritage Fund, as Norway does with its fund, we'd have to either cut more than $8 billion from the budget (a 24% reduction) or increase other sources of revenue to compensate. If it's taxes, it would take a 78% increase.

        http://alberta.ca/acn/201106/3080506...ables%20BG.pdf

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        • #5
          Originally posted by moahunter View Post
          ^X2, Norway was smart enough to stay out of the EU (otherwise, the Greeks/Italians/Portugese, etc., would have spent most of those savings by now, just like the Quebec mafia does for Alberta).
          Quebec mafia? Really moahunter, are you that desperate for attention?

          Originally posted by moahunter View Post
          Also keep in mind that Norway is one of the most in-debt nations on earth ($131k per capita, versus 30k per capita for Canada).
          I thought you're one of those self-professed/styled 'bean-counter' types? Why speak in terms of per capita numbers when the most recognized and relevant metric is the debt-to-GDP ratio... most particularly, gross debt. Debt per capita is such a meaningless figure that you would have had to have gone out of your way to choose it over the several debt-to-GDP variants. Why would you do that?

          Why not do the proper thing and show the real relevant relationship... state those (gross) debt-to-GDP figures for both Canada and Norway... sure you can! Here, let me give you a hand:

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          • #6
            ^according to you most proper. Here is an independent take, Norway at number 10 on the infamy list:

            http://www.vancouversun.com/business...642/story.html

            As mentioned, its easy to save, when all you are doing is putting your borrowings there. Alberta could have a fund just like Norway if we went out and borrowed tomorrow and gambled it all (and of course, pulled out of Canada, so tax dollars stayed in the Province). Instead, Alberta has chosen to pay off all the debt first, and to remain in Canada contributing to underprivlleged parts, which I think is more socially responsible than Norways choice to stay out of the EU.
            Last edited by moahunter; 09-11-2011, 12:20 PM.

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            • #7
              Originally posted by Jeff View Post
              Originally posted by moahunter View Post
              Also keep in mind that Norway is one of the most in-debt nations on earth ($131k per capita, versus 30k per capita for Canada).
              I thought you're one of those self-professed/styled 'bean-counter' types? Why speak in terms of per capita numbers when the most recognized and relevant metric is the debt-to-GDP ratio... most particularly, gross debt. Debt per capita is such a meaningless figure that you would have had to have gone out of your way to choose it over the several debt-to-GDP variants. Why would you do that?

              Why not do the proper thing and show the real relevant relationship... state those (gross) debt-to-GDP figures for both Canada and Norway... sure you can! Here, let me give you a hand:
              Originally posted by moahunter View Post
              ^according to you most proper. Here is an independent take, Norway at number 10 on the infamy list:

              http://www.vancouversun.com/business...642/story.html
              No. Your latest attempt has you now referencing external debt... which is both public (government) and private (private households/corporations) debt owed to nonresidents. Most certainly, when you highlighted nations default potentials by mentioning, "Greeks/Italians/Portugese, etc.", you were most definitely in alignment with considerations of public debt, not inclusive of private debt.

              Comment


              • #8
                Just a news item... no one should be surprised...


                All Norwegians become crown millionaires, in oil saving landmark
                Wed Jan 8, 2014

                excerpts:
                "OSLO, Jan 8 (Reuters) - Everyone in Norway became a theoretical crown millionaire on Wednesday in a milestone for the world's biggest sovereign wealth fund that has ballooned thanks to high oil and gas prices.

                Set up in 1990, the fund owns around 1 percent of the world's stocks, as well as bonds and real estate from London to Boston, making the Nordic nation an exception when others are struggling under a mountain of debts. ..."

                "Many countries have found that temporary large revenues from natural resource exploitation produce relatively short-lived booms that are followed by difficult adjustments," she said in an email. ...

                "The fund is a success in the sense that parliament has managed to put aside money for the future. There are many examples of countries that have mot managed that," said Oeystein Doerum, chief economist at DNB Markets.

                Norway has sought to avoid the boom and bust cycle by investing the cash abroad, rather than at home. ..."



                http://www.reuters.com/article/2014/...0K229720140108

                Comment


                • #9
                  Originally posted by KC View Post
                  Just a news item... no one should be surprised...


                  All Norwegians become crown millionaires, in oil saving landmark
                  Wed Jan 8, 2014

                  excerpts:
                  "OSLO, Jan 8 (Reuters) - Everyone in Norway became a theoretical crown millionaire on Wednesday in a milestone for the world's biggest sovereign wealth fund that has ballooned thanks to high oil and gas prices.

                  Set up in 1990, the fund owns around 1 percent of the world's stocks, as well as bonds and real estate from London to Boston, making the Nordic nation an exception when others are struggling under a mountain of debts. ..."

                  "Many countries have found that temporary large revenues from natural resource exploitation produce relatively short-lived booms that are followed by difficult adjustments," she said in an email. ...

                  "The fund is a success in the sense that parliament has managed to put aside money for the future. There are many examples of countries that have mot managed that," said Oeystein Doerum, chief economist at DNB Markets.

                  Norway has sought to avoid the boom and bust cycle by investing the cash abroad, rather than at home. ..."



                  http://www.reuters.com/article/2014/...0K229720140108
                  Pardon my ignorance, but what's the point of the fund, other than to save money? Is it actually ever used for anything?

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                  • #10
                    ^Probably to pay for future social expenditures. Norwegians are still heavily taxed and would've spent themselves into hard times if they hadn't have discovered oil.

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                    • #11
                      As opposed to Alberta who always seem to spend themselves into hard times even when the economy is doing well and only have 15bn, a sum that hasn't moved much in years upon years.

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                      • #12
                        Far better than our fund, but "millionaires" is a stretch. That kroner, so the fund is about $175k in dollars, minus a still substantial government debt at about $25,000 per person.

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                        • #13
                          Originally posted by kkozoriz View Post
                          As opposed to Alberta who always seem to spend themselves into hard times even when the economy is doing well and only have 15bn, a sum that hasn't moved much in years upon years.
                          Better to have a 5% GST than a 25% VAT. Of course, people do tend to forget that a lot of other provincial hands come stretched out to take a large chunk of our pie. Wonder how much our fund be if every province decided to create their own wealth rather than looking for handouts.

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                          • #14
                            Much like how Alberta turned away all federal money before oil was discovered. Nothing like standing up for principles. Oh wait....

                            We're part of a country. The haves help out the have nots. That's how it works. Don't like it? Start a push for Alberta independence. Of course, you then have to worry about Wood Buffalo claiming that the rest of the province keeps showing up with their hand out.

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                            • #15
                              There just has to be a rebalancing based on the definitions of haves and have-nots. The transfer of wealth should be done to keep the supposed have-not provinces standard of public services up to an acceptable level. It shouldn't be for providing superior services to provinces controlled by bigots such as Quebec and their $1 an hour daycares.

                              Anyway, I guess this or the post above are in no way on topic but the point is Norway is a country that controls all its oil revenues whereas Alberta's oil wealth gets split with the federal government.

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