The Red Dragon; The Attack Of Asian Capital  in American CapitalMarkets   

Sovereign Funds (http://en.wikipedia.org/wiki/Sovereign_wealth_fund) have always been censured because they pose a political threat because of the nature of the money. However, what exactly are we dealing with when we speak of “sovereign Funds” and to what extent can we actually use the nature of the fund to help other countries who would certainly need the  tremendous returns these funds  seem to generate(  http://www.economist.com/finance/displaystory.cfm?story_id=9230598).  At the moment Asia generates more capital for sovereign funds than any other region of the world.  

China dominates this area and the fact that Chinese capital is on outweighing United States Capital is something that is problematic because it is seen as a proxy for economic domination of the United States by the Red Dragon.   From an economic standpoint of view, the argument is absurd because the capital injected by the Asian tigers does to the economy what helium does to a balloon,  It helps to a stimulate the economy and the United States gains; but the fact is that the returns from these funds are owed by Asians and plowing back the money back into the economy is something the can choose or go against; either way the funds are not only bad given the political argument of domination---however legitimate that may be.      However, from a developmental standpoint view, developing countries have enough reserves to actually engage in these sovereign funds; they can put the money to work so that the country revenue is not entirely dependent on taxes--- (check Bank of South Africa, Bank of Zambia, Bank of Nigeria).

These countries can create Sovereign Funds with companies such Merrill Lynch, Goldman Sachs, UBS,   Societal General (?), Morgan Stanley, as well as other prominent investment banks (small or large0. The idea is that private banks would view the governments of these countries just like they view any client with whom they work with and the level of output expected would be equally demanding. These countries, developing countries, would certainly benefit from a better cash flow; and given sound management the funds can be used to build long term projects given the nature of their long term investment.  I can’t comment about the politics of these funds which technically are eroding notions of national sovereignty by aggressive.ly engaging in the capital markets of another country; but I can rightly suggest that notions of barriers in economics are as real as the fountain of youth! Capital should be allowed to move exponentially because it is only capital that has the power to generate a tremendous amount of economic activity leading to unintended higher Gross Domestic Output.

Note: The Post takes a lot from my senior thesis:      

Foreign Direct Investment: The Role of Capital in   Zambia and Bostwana.