The U.S. net international investment position at yearend 2006 was -$2,539.6 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 2005, the U.S. net international investment position was -$2,238.4 billion (revised). The U.S. net international investment position includes newly introduced comprehensive estimates of U.S. cross-border transactions and positions in financial derivatives (see box 1).
The -$301.3 billion change in the U.S. net investment position from yearend 2005 to yearend 2006 was largely due to especially strong net foreign purchases of U.S. securities. The impact of these net purchases was partly offset by price appreciation of U.S.-held foreign stocks that surpassed by a large amount price appreciation of foreign-held U.S. stocks, and by exchange- rate changes resulting from the appreciation of most major foreign currencies against the U.S. dollar, which raised the dollar value of U.S.-owned assets abroad.
I just got done looking at the U.S. Net International Investment Position at Yearend 2006 and generated the following graph:
The actual numbers come from the Bureau of Economic Analysis spreadsheets here and here. As can be seen, U.S. private assets held abroad and foreign private assets held in the U.S. have been nearly the same since 1985. U.S. private assets fell behind from about 2000 to 2003 but have since caught back up. However foreign official assets held in the U.S. (I assume this is chiefly foreign central banks) continue to grow while U.S. government assets held abroad remain at almost none. Hence, it's the growing federal debt held by official foreign sources that seems to be the chief culprit in our net international investment deficit.
