Home > News Release: U.S. Net International Investment Position at Yearend 2009
FOR IMMEDIATE RELEASE AT 10:00 A.M. EDT, FRIDAY, JUNE 25, 2010
BEA 10-32


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U.S. Net International Investment Position at Yearend 2009
      
        The U.S. net international investment position at yearend 2009 was
-$2,737.8 billion (preliminary), as the value of foreign investments in the
United States continued to exceed the value of U.S. investments abroad (table
1).  At yearend 2008, the U.S. net international investment position was
-$3,493.9 billion (revised).

    The $756.0 billion change in the U.S. net investment position from yearend
2008 to yearend 2009 reflected (1) price appreciation of U.S.-held foreign
stocks that surpassed the price appreciation of foreign-held U.S. stocks,
(2) appreciation of most major currencies against the U.S. dollar that raised
the dollar value of U.S.-owned assets abroad, and (3) “other” changes (such as
changes in reporting panels and capital gains and losses from the sales of
direct investment assets) that raised the value of U.S.-owned assets abroad
more than the value of foreign-owned assets in the United States.  The impact
of these differences was partly offset by net foreign acquisitions of financial
assets in the United States that exceeded net U.S. acquisitions of financial
assets abroad.

    The following are highlights for 2009:

*   Foreign acquisitions of financial assets in the United States, excluding
    financial derivatives, were $305.7 billion in 2009, down from $454.7
    billion in 2008.  In 2009, foreign residents, including foreign official
    institutions, purchased more U.S. Treasury securities and U.S. stocks than
    they sold, and foreign direct investment in the United States increased.
    These financial inflows were partly offset by a decrease in U.S. banks’
    liabilities to foreign residents and by foreign residents’ net sales of U.S.
    corporate and agency bonds.

*   U.S. acquisitions of financial assets abroad, excluding financial
    derivatives, were $140.5 billion in 2009, a shift from $156.1 billion in
    net sales of assets in 2008.  In 2009, U.S. banks’ claims against foreign
    residents and U.S. direct investment abroad increased, and U.S. residents
    bought more foreign securities than they sold.  These financial outflows
    were partly offset by a decrease in U.S. government assets resulting from
    the reversal of currency swaps between the U.S. Federal Reserve System and
    foreign central banks, and by a decrease in U.S. nonbanks’ claims against
    foreign residents.

*   U.S. holdings of financial derivatives as assets (with positive gross fair
    value) decreased $2,615.4 billion, and as liabilities (with negative gross
    fair value) decreased $2,583.7 billion.  These large changes are mainly due
    to decreases in U.S. claims and liabilities from interest-rate and credit-
    default swap contracts.  Because changes to U.S. assets and liabilities are
    offsetting, they have little impact on the U.S. net investment position.

*   Price increases in most foreign stock markets raised the value of U.S.
    holdings of foreign stocks by a large amount.  Price increases in the U.S.
    stock market also raised the value of foreign holdings of U.S. stocks, but
    by a smaller amount.  In 2009, prices of financial assets such as stocks
    and corporate bonds rose sharply but prices of U.S. Treasury securities and
    agency bonds fell.

*   Appreciation of most major foreign currencies against the U.S. dollar from
    yearend 2008 to yearend 2009 raised the dollar value of U.S.-owned assets
    abroad, especially the value of U.S.-owned foreign stocks.


    U.S.-owned assets abroad decreased $865.8 billion to $18,379.1 billion.

    U.S. holdings of financial derivatives as assets (with positive gross fair
value) decreased $2,615.4 billion to $3,512.0 billion.

    U.S. official reserve assets increased $110.1 billion to $403.8 billion,
mostly as a result of price appreciation of U.S. gold stock and new allocations
of special drawing rights to the United States by the International Monetary
Fund.  U.S. government assets other than official reserve assets decreased
$541.3 billion to $82.8 billion, as a result of the reversal of swaps under
temporary reciprocal currency arrangements between the U.S. and foreign central
banks to provide dollar liquidity to foreign banks during the financial crisis.

    The stock of U.S. direct investment abroad at current cost increased $308.4
billion to $4,051.2 billion, mostly as a result of reinvested earnings (see
box).

    U.S. holdings of foreign securities increased $1,485.3 billion to $5,471.0
billion, mainly due to increases in the prices of foreign stocks held by U.S.
residents.

    Claims on foreigners reported by U.S. banks increased $387.7 billion to
$4,064.1 billion.

    Claims on foreigners reported by U.S. nonbanks decreased $0.5 billion to
$794.2 billion.


    Foreign-owned assets in the United States decreased $1,621.8 billion to
$21,116.9 billion.

    U.S. holdings of financial derivatives as liabilities (with negative gross
fair value) decreased $2,583.7 billion to $3,384.1 billion.

    Foreign official assets in the United States increased $433.8 billion to
$4,373.8 billion, mostly as a result of especially strong net foreign official
purchases of U.S. Treasury securities.

    Foreign private holdings of U.S. securities other than U.S. Treasury
securities increased $666.4 billion to $5,287.2 billion, mainly due to
increases in the prices of U.S. stocks held by foreign residents.

    The stock of foreign direct investment in the United States at current cost
increased $151.4 billion to $2,672.8 billion, mostly as a result of financial
inflows (see box).

    The stock of U.S. currency abroad increased $12.6 billion to $313.8
billion.

    Liabilities to private foreign residents reported by U.S. banks decreased
$211.6 billion to $3,593.6 billion.

    Liabilities to private foreign residents reported by U.S. nonbanks
decreased $66.1 billion to $665.5 billion.

    Foreign private holdings of U.S. Treasury securities decreased $24.7
billion to $826.2 billion.

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                    Valuation Methods for Direct Investment

    Direct investment at current cost is BEA's featured measure of direct
investment in current-period prices.  The current-cost method values the U.S.
and foreign parents' share of their affiliates' investment in plant and
equipment using the current cost of capital equipment, in land using general
price indexes, and in inventories using estimates of their replacement cost.

    Direct investment at market value is an alternative measure of direct
investment in current-period prices.  The market-value method values the
owners' equity component of the direct investment position using indexes of
stock market prices.

    The historical-cost method values assets and liabilities at their book
value. Country and industry detail can be shown only under this method.  Data
on this basis are not presented in this release.
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                                    Revisions

      Revisions to the U.S. international investment position statistics
reflect the ongoing effort to modernize and enhance BEA’s international
economic accounts and newly available source data.

      Modernization

      BEA is completing the implementation of the latest international
guidelines on the treatment of allocations of special drawing rights (SDRs) by
including the reserve-related liabilities in “other U.S. government
liabilities” (table 1, line 31).  As a result, the U.S. international
investment position statistics are revised for 1976-2008.

      Permanent debt between affiliated banks, bank holding companies, and
financial holding companies is reclassified from direct investment (table 1,
lines 18 and 35) to U.S. claims and liabilities reported by U.S. banks and
securities brokers (table 1, lines 23 and 42).  Position statistics are revised
for 2007 and 2008.


      Newly available source data for 2007 and 2008

      The revised position statistics for 2007 and 2008 also reflect new data
from the annual surveys of multinational companies’ operations as well as new
and updated data from the quarterly surveys of direct investment, the shift of
several U.S. nonbanking entities to bank holding companies at the end of 2008,
the incorporation of results from the U.S. Treasury Department’s annual survey
of U.S. Ownership of Foreign Securities for December 2008, and the benchmark
survey of Foreign-Residents’ Holdings of U.S. Securities for June 2009.

      The previously published U.S. net international investment position at
yearend 2008 was -$3,469.2 billion.  Revisions to the U.S. net international
investment position from all sources were $224.2 billion for 2007 and -$24.6
billion for 2008.

      A more detailed discussion of the U.S. net international investment
position at yearend 2009 and revised historical data will appear in the July
issue of the Survey of Current Business.  That issue will also contain an
article about historical-cost direct investment positions, with detail by
country and industry, and revised direct investment historical data.

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