FOR IMMEDIATE RELEASE AT 8:30 A.M. EDT, TUESDAY, JUNE 26, 2012
BEA 12-27


* See the navigation bar at the right side of the news release text for links to data tables, contact personnel and their telephone numbers, and supplementary materials.


U.S. Net International Investment Position at Yearend 2011
   The U.S. net international investment position at yearend 2011 was -$4,030.3
billion (preliminary), as the value of foreign investment in the United States
continued to exceed the value of U.S. investment abroad (table 1).  At yearend 2010,
the U.S. net international investment position was -$2,473.6 billion (revised).  The
-$1,556.7 billion change in the U.S. net investment position from yearend 2010 to
yearend 2011 was mainly attributable to net price changes of -$802.1 billion and net
financial flows of -$556.3 billion.

   Highlights for 2011:

*  Increases in the prices of U.S. Treasury bonds and declines in foreign stock prices
raised the value of foreign investment in the United States and lowered the value of
U.S. investment abroad.

*  The impact of changes in U.S. and foreign asset prices of -$802.1 billion
accounted for over half of the -$1.6 trillion change in the U.S. net international
investment position.

*  Most of the rest of the change in the U.S. net international investment position
reflected foreign acquisitions of U.S. assets (including over $400 billion in U.S.
Treasury securities) that exceeded U.S. acquisitions of foreign assets. U.S.
acquisitions of foreign assets were reduced by an unusual decline in U.S. claims on
foreigners as reported by U.S. banks and securities brokers.

*  The appreciation of the U.S. dollar against a trade-weighted index of major
currencies caused a change of -$23.0 billion in the U.S. net international
investment position.

*  The U.S. net international investment position was equal to 2.6% of the value of
all U.S. financial assets at the end of 2011, up from 1.6% in 2010, and up from the
recent peak of 2.3% in 2008./1/

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                                     Revisions

   The U.S. international investment position statistics released today have been
revised for 2009 and 2010.  The previously published U.S. net international
investment position at yearend 2010 was -$2,471.0 billion.  Revisions to the U.S.
net international investment position were $74.7 billion for 2009 and -$2.6 billion
for 2010.

   The revisions reflect newly available data from the Annual Survey of Foreign
Portfolio Holdings of U.S. Securities at end-June 2011 and the Annual Survey of U.S.
Ownership of Foreign Securities at end-December 2010 conducted by the Federal
Reserve System and the U.S. Treasury Department.  The revisions also reflect other
newly available and revised data from the Treasury International Capital reporting
system and from BEA's surveys of direct investment.

   The July SURVEY OF CURRENT BUSINESS will contain an article with a more detailed
discussion of the U.S. net international investment position at yearend 2011 and
revised historical data.  That issue will also contain an article about direct
investment positions valued at historical-cost and revised historical data on direct
investment with detail by country and industry.

   In July BEA will also release on its Web site detailed investment position
statistics presented in table 1 of this release for 2003-2008 and revised
statistics for 2009-2010.

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Financial flows

   Net financial flows of -$556.3 billion resulted from U.S. acquisitions of
financial assets abroad (excluding financial derivatives) of $483.7 billion, less
foreign acquisitions of financial assets in the United States (excluding financial
derivatives) of $1,001.0 billion, plus net financial flows from financial
derivatives of -$39.0 billion.

   U.S. acquisitions of financial assets abroad, excluding financial derivatives,
were $483.7 billion, down from $939.5 billion in 2010.  In 2011, U.S. official
reserve assets, U.S. government assets other than official reserve assets, and
direct investment abroad increased, and U.S. purchases of foreign securities
exceeded sales.  These financial outflows were partly offset by decreases in claims
of U.S. banks and securities brokers on foreign residents.

   Foreign acquisitions of financial assets in the United States, excluding financial
derivatives, were $1,001.0 billion, down from $1,308.3 billion in 2010.  In 2011,
foreign official assets in the United States, U.S. banks and securities brokers
liabilities to foreign residents, and foreign direct investment in the United States
increased, and foreign purchases of U.S. Treasury securities exceeded sales.  These
financial inflows were partly offset by foreign sales of U.S. corporate and agency
bonds that exceeded purchases.

Valuation adjustments

   Valuation adjustments included -$802.1 billion from price changes, -$23.0 billion
from exchange-rate changes, and -$175.3 billion in other changes.

   Price changes led to a -$802.1 billion change in the U.S. net international
investment position, reflecting price decreases in the value of U.S. holdings of
foreign stocks and price increases in the value of foreign holdings of U.S. debt
securities.  These price changes were partly offset by increases in the value of the
U.S. gold stock as the market price of gold continued to climb.

   Exchange-rate changes led to a -$23.0 billion change in the U.S. net international
investment position, reflecting depreciation in the foreign exchange index of major
foreign currencies against the U.S. dollar from yearend 2010 to yearend 2011 that
lowered the dollar value of U.S.-owned assets abroad.  It also lowered the dollar
value of foreign-owned assets in the United States denominated in foreign currencies,
but by a smaller amount.

   Other statistical changes led to a -$175.3 billion change in the U.S. net
international investment position.  In 2011, other valuation changes included more
complete reporting of the Treasury International Capital position data, the
incorporation of new reporters from the U.S. Treasury Departments June 2011 survey
of foreign portfolio holdings of U.S. securities, capital gains and losses from the
sale of direct investment assets, and other adjustments to source data.


Investment positions at yearend 2011

   U.S.-owned assets abroad increased $834.0 billion to $21,132.4 billion.

   Financial derivatives held as assets increased $1,052.4 billion to $4,704.7
billion, mainly due to increases in U.S. claims from single-currency interest rate
swaps.

   U.S. official reserve assets increased $47.4 billion to $536.0 billion, as a
result of price appreciation of the U.S. gold stock and the increased U.S. reserve
position in the International Monetary Fund.

   U.S. government assets other than official reserve assets increased $103.7 billion
to $178.9 billion, mainly as a result of increases in U.S. foreign currency holdings
from central bank liquidity swaps between the U.S. Federal Reserve System and foreign
central banks.

   The stock of U.S. direct investment abroad at current cost increased $374.7 billion
to $4,681.6 billion, mainly due to especially strong financial outflows that were
mostly accounted for by reinvested earnings.  (See the box on page 5 for a
description of direct investment valuation methods.)

   U.S. holdings of foreign securities decreased $414.4 billion to $5,922.0 billion,
as a result of price decreases of foreign stocks.

   Claims on foreigners reported by U.S. banks and securities brokers decreased
$251.8 billion to $4,312.4 billion.

   Claims on foreigners reported by U.S. nonbanks decreased $77.9 billion to $796.8
billion.

   Foreign-owned assets in the United States increased $2,390.6 billion to $25,162.6
billion.

   Financial derivatives held as liabilities increased $1,036.5 billion to $4,578.4
billion, mainly due to increases in U.S. liabilities from single-currency interest
rate swaps.

   Foreign official assets in the United States increased $338.1 billion to $5,250.8
billion, mostly as a result of net purchases and price appreciation of U.S. Treasury
securities.

   Foreign private holdings of U.S. Treasury securities increased $316.2 billion to
$1,418.1 billion, mostly as a result of strong net purchases.

   Liabilities to private foreign residents reported by U.S. banks and securities
brokers increased $313.4 billion to $4,011.6 billion.

   The stock of foreign direct investment in the United States at current cost
increased $311.1 billion to $2,908.8 billion; mainly due to financial inflows that
were mostly accounted for by net equity investment and reinvested earnings (see the
box below).

   Foreign private holdings of U.S. securities other than U.S. Treasury securities
increased $34.2 billion to $5,968.2 billion, as increases in prices, mostly of U.S.
bonds, were partly offset by net sales.

   Liabilities to private foreign residents reported by U.S. nonbanks decreased $13.9
billion to $629.7 billion.

   The stock of U.S. currency abroad increased $55.0 billion to $397.1 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.
Direct investment positions at market value are presented in the memoranda of table
1 of this release.

   The historical-cost method values assets and liabilities at their book values.
Country and industry detail can be shown only under this method.  Statistics on this
basis are not presented in this release, but are available on BEA's Web site at
www.bea.gov/international/di1usdbal.htm for U.S. direct investment abroad and
www.bea.gov/international/di1fdibal.htm for foreign direct investment in the United
States.

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                                *          *          *

    BEAs national, international, regional, and industry estimates; the Survey of
Current Business; and BEA news releases are available without charge on BEAs Web
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1.  Board of Governors of the Federal Reserve System (FRS), Flow of Funds Accounts 
of the United States, Flows and Outstandings, First Quarter 2012, Release Z.1.
Statistical Release (Washington, DC: FRS, June 7, 2012) Table L.5, page 66.
According to June 2012 Z.1 release, the value of all U.S. financial assets was
$156,861.7 billion at the end of 2011.  U.S. assets abroad from the international
investment position were $21,132.4 billion at the end of 2011, 13.5% of all U.S.
assets, up from 13.2% in 2010, but down from the 13.8% series peak in 2008.

NOTE: This news release is available on BEAs Web site (www.bea.gov) along with 
Highlights(/newsreleases/international/intinv/2011/pdf/intinv11_fax.pdf)
related to this release, the latest detailed statistics 
(/international/index.htm#iip) for U.S. international transactions, 
and a description of the estimation methods
(/scb/pdf/2010/02 February/0210_guide.pdf) used to compile them.