Norweigan oil fund • Hacker News Board

Re: Norweigan oil fund

#171

Post by a-priori » Thu, Aug 01, 2019, 3:18 PM UTC

I did some quick math and with their current annual return rate of 5.8%, the returns from the the Oil Fund could finance the government's budget entirely once it gets to be about $2T in size. That's about 2x its current size.

That's still about 20 years away at their current growth rate, and the government budget would probably increase by then, but it's still probably achievable. What happens then? Norway could theoretically cut its other income, including income tax, to zero and still maintain its current expenses.

Re: Norweigan oil fund

#172

Post by vidarh » Thu, Aug 01, 2019, 3:20 PM UTC

panpanna wrote: post #14

> On average, the fund holds 1.4 percent of all of the world’s listed companies. Why fund businesses in other countires? Shouldn't Norway try to set up some more industries at home? Everyone claim Europe (was: EU) needs more VC funding to stop the brain drain. Well, here is a huge pool of money just waiting to be spent

The Norwegian government also owns about a third of the total shares by value listed on the Oslo Stock Exchange. This fund is explicitly only investing outside Norway to prevent driving inflation, but the government also pumps a lot of money into Norwegian businesses.

Re: Norweigan oil fund

#173

Post by RankingMember » Thu, Aug 01, 2019, 3:20 PM UTC

Gravityloss wrote: post #152

Does Alaska have something like this? Or Texas?

Alaska does, and also pays a dividend every year: https://en.wikipedia.org/wiki/Alaska_Permanent_Fund

Re: Norweigan oil fund

#174

Post by kwhitefoot » Thu, Aug 01, 2019, 3:20 PM UTC

Y_Y wrote: post #135

daj40 wrote: post #93

Earlier quoted context omitted.

Along with being more eco minded, electric cars are actually more affordable in Norway, there is a significant tax placed on other vehicles. https://elbil.no/english/norwegian-ev-policy/

They let poor countries burn the oil, and use the money to pay for electric cars.

True but other countries also let poor countries burn the oil and do nothing useful with the money.

Re: Norweigan oil fund

#175

Post by pjc50 » Thu, Aug 01, 2019, 3:20 PM UTC

mruts wrote: post #134

spamizbad wrote: post #118

Earlier quoted context omitted.

America should seriously consider nationalizing its resources and using that money to either fund programs to reverse the trend of its declining life expectancy or at the very least reduce the deficit (and perhaps, one day, bootstrap a sovereign wealth fund of its own)

One of my clients at my old finance firm was Alaska’s oil fund. They do pretty well for themselves and dole out 2k/year in cash to everyone living there. It’s unsurprisingly a very popular program, though I’m kind of morally opposed to a government function like that.

> though I’m kind of morally opposed to a government function like that.

Yes, it's much better for the government to allow a single person to appropriate all that wealth for themselves. /s

Re: Norweigan oil fund

#176

Post by chrisbolt » Thu, Aug 01, 2019, 3:21 PM UTC

daj40 wrote: post #93

lelima wrote: post #69

A friend lives in Oslo, sometimes I visit, it shock me the amount of electric vehicles, in one single street all cars parked were Tesla(not the posh area). The city have so much nature, is even hard to explain.

Along with being more eco minded, electric cars are actually more affordable in Norway, there is a significant tax placed on other vehicles. https://elbil.no/english/norwegian-ev-policy/

Gas is also highly taxed, third highest prices in the world: https://www.globalpetrolprices.com/gasoline_prices/

Re: Norweigan oil fund

#177

Post by BurningFrog » Thu, Aug 01, 2019, 3:23 PM UTC

lr4444lr wrote: post #34

The Norwegian success is the single biggest piece of evidence as to why the Venezuelan catastrophe was largely avoidable, and the fault of irresponsible leadership.

Or you could read up on the astonishing crimes and incompetence of the Chavez regime.

Re: Norweigan oil fund

#178

Post by stingraycharles » Thu, Aug 01, 2019, 3:24 PM UTC

buboard wrote: post #73

lnsru wrote: post #28

Wow! These people must be extraordinary to use oil money this way! Not kidding! Never been in Norway, but in countries I have ever been this would be barely possible due to corruption and the needs of the politician’s buddies. Like yachts, private jets, Bentleys and Vertu phones. This $186k/person isn’t far from what average German poses: https://www.bundesbank.de/resource/blob/617492/cd59713c156ad...

Norway was lucky to be a very developed society before oil was discovered. In most countries oil is a curse

But to have the restraint of not spending the money and putting it into a fund is a whole different level.

Being from the Netherlands, which has/had large gas fields, it makes me jealous our government didn’t have a similar foresight.

Re: Norweigan oil fund

#179

Post by Ididntdothis » Thu, Aug 01, 2019, 3:24 PM UTC

fastball wrote: post #168

Ididntdothis wrote: post #151

Earlier quoted context omitted.

That's what it's always sold for. Instead of staying in soul crushing jobs in order to survive people could pursue new things and be creative.

Right, the emphasis being on "pursue new things and be creative". UBI is generally not intended to allow people to live out their entire lives without doing anything of value for anyone else. And if you're doing things that are valuable to the rest of society, you are paid under capitalism. So the hope with UBI is that you should never need it for your entire life because you're not making any money at all.

What do the people do if their new thing doesn’t work out? There will be plenty of these. If UBI isn’t life long then it’s more like giving everybody a sum of money which they can use to start something new.

If they cant fall back on UBI then it’s exactly the same situation as we have now where a lot of people stay in careers they hate because they are afraid of losing what they have.

Re: Norweigan oil fund

#180

Post by Cthulhu_ » Thu, Aug 01, 2019, 3:28 PM UTC

kwhitefoot wrote: post #174

Y_Y wrote: post #135

Earlier quoted context omitted.

They let poor countries burn the oil, and use the money to pay for electric cars.

True but other countries also let poor countries burn the oil and do nothing useful with the money.

Some invest it themselves into real estate, both in their own country (like highest towers, most fancy hotel, palm tree shaped islands) and abroad (skyscrapers and office buildings in various financial structures).

They're really setting themselves up for them and their future generations to remain rich and comfortable for the forseeable future even when oil dries up or demand goes down.