Emirati investors follow the movement of stock prices at the Dubai Financial Market
Emirati investors follow the movement of stock prices at the Dubai Financial Market - 
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Kai Ryssdal: You can file this one away in the "my how times have changed" category. A year ago -- before the words financial crisis had really entered the vernacular -- there was another phrase making the rounds. Sovereign Wealth Funds.

Those huge pools of money other governments were gathering and spending. Often times spending it here buying whatever struck their fancy -- shares in big Wall Street banks, or even retail outfits.

Dubai's investment fund bought the high-end chain Barney's a little more than a year ago. Now it's looking to sell, a sign that sovereign wealth might not be so wealthy anymore. Marketplace's Sam Eaton reports.

Sam Eaton: At the height of the boom Dubai's purchase of Barney's for nearly a billion dollars seemed to fit nicely into its opulent spending spree back home. But that was before the global economic crisis soured Dubai's strategy of becoming an international hub for luxury tourism and business. Harvard's Kenneth Rogoff is a former chief economist at the International Monetary Fund.

Kenneth Rogoff: Dubai has borrowed tons of money to build buildings. They've built islands. There are cranes everywhere and now they're desperate for cash.

But Dubai may be the exception when it comes to sovereign wealth funds off-loading U.S. assets, especially those in the financial sector where shares have plunged. University of Maryland business professor Peter Morici.

Peter Morici: These sovereign wealth funds have been burned in the financial sector and it's likely too late for them to get out.

China invested billions in U.S. banks. Selling now wouldn't make much sense. But Harvard's Kenneth Rogoff says China has learned a valuable lesson.

Rogoff: They're beside themselves with joy that they lost so much money because it so unnerved them that they didn't invest in anything else. They held onto treasury bills.

Which raises an entirely different set of problems.

Rogoff: There's a concern that China, other holders of treasury bills, might say 'wait a second, look at how much money the U.S. is printing, look at how much debt the U.S. is running up.' These things are going to become worthless.

And if that spooks foreign investors into unloading their treasury bills, he says you can kiss low interest rates and lack of inflation goodbye.

I'm Sam Eaton for Marketplace.

Follow Sam Eaton at @eatonsam