Singapore does what?!

Singapore has one of the richest wealth funds on the planet and it's banned from spending almost any of it at home. Singapore has two wealth funds: GIC, which invests 100% outside of Singapore, and Temasek, which invests both locally and internationally. So here's the thing about that money: it's sitting in foreign reserves, not Sing dollars. So the second the government wants to spend any of it inside Singapore, it has to convert it to Sing dollar first. That conversion alone creates a wave of demand for the currency and so that pushes the Sing dollar stronger. Then once that money is actually being spent inside the economy, you've added a lot more money into circulation, but the economy hasn't produced any more goods or services to match it. Same amount of stuff, but more money bidding for it. So now you're getting hit twice: at home, your money buys less, and abroad, your exports cost more because your currency is stronger. Two totally different mechanisms creating the same result. You're hurting your own trade position. So that's why GIC stays completely out. Grow the money somewhere else and don't touch the economy you're trying to protect. Then we have Temasek, which isn't trying to avoid the Singaporean economy. Its aim is actually to own specific pieces of it. 52%, so just over half of its portfolio, consists of Singaporean companies. And these aren't passive stakes. When a government owns a significant piece of a company, it gets a real say on how that company runs, not just a check if it does well. Temasek holds a 53% stake in Singapore Airlines, a 29% stake in DBS, the country's largest bank, wholly owns PSA International, which runs the ports that keep Singapore's trade moving, and it wholly owns SMRT, the company that runs the country's train network. So you can probably tell that these aren't just random bets. Every single one of them is something that Singaporean citizens touch every single day. How they commute, where their money sits, how trade keeps running. So here's the one thing that both funds are solving for. GIC keeps money out because proximity to the economy is the risk, and Temasek keeps a significant portion in because proximity is the point. It's what gives the government real influence over industries that people depend on every single day. Same government, same goal: protect the interests of the country. But two completely different tools to do it. And that's the whole strategy: keep the growth outside and keep the control inside. And that's Singapore's playbook. If you found this useful, then make sure to follow.