Foreign-Owned Assets in the U.S. Top $20 Trillion

According to data just released by the BEA on the "U.S. Net International Investment Position at Yearend 2007," foreign-owned assets in the United States increased $3,474 billion in 2007 to $20,081 billion (see top chart above), representing the largest-ever annual dollar increase, and the largest percentage increase in 20 years (see bottom chart above) for foreign investment in the U.S.

From the highlights:

Foreign private holdings of U.S. securities (other than U.S. Treasury securities) increased $760 billion to $6.1 trillion. Foreign holdings of U.S. bonds increased to $3.3 trillion mostly as a result of net foreign purchases, and foreign holdings of U.S. stocks increased to $2.8 trillion as a result of both net foreign purchases and price appreciation.

The stock of foreign direct investment in the United States increased $271 billion to $2.42 trillion.

Bottom Line: Despite subprime mortgage and credit problems, a weak economy and real estate market, foreign investors expressed their continued confidence in the U.S. economy, by buying our stocks and bonds, and investing billions of dollars in American companies.

Comments

[normthefedup:]

Thank God for their investment and confidence, and conversely, God forbid they ever call in their markers. Now THAT'S a double-edged sword if I ever saw one. Make no mistake about it, we're definitely in trouble and in decline. If we made a pile of $100 bills that represented the foreign holdings in equities and bonds, the pile would be 8700 miles high. Scary, folks, scary.

2008 Jul 08 10:27 AM

[Paul S C:]

That's almost exactly 14,000 km high for any of those foreign investors reading this - who I would encourage to use all that ownership to push for a swift transition to the metric system in the U.S. I'm just saying!

2008 Jul 08 01:29 PM

[Ganesh Sastri:]

The foreign investment will continue to pile while confidence in US lasts. When the confidence is US is punctured, most of it will disappear and with that the value of USD will also disappear.

2008 Jul 09 12:15 AM