Thanks for the info as I wasn't clear on the meaning of "foreign direct investment". However, I did find the following definition of it at http://economics.about.com/cs/economicsglossary/g/fdi.htm:
Definition: FDI stands for Foreign Direct Investment, a component of a country's national financial accounts. Foreign direct investment is investment of foreign assets into domestic structures, equipment, and organizations. It does not include foreign investment into the stock markets. Foreign direct investment is thought to be more useful to a country than investments in the equity of its companies because equity investments are potentially "hot money" which can leave at the first sign of trouble, whereas FDI is durable and generally useful whether things go well or badly.
Hence, it doesn't include investments in stocks and is, as you said, usually thought to be more useful. It is interesting (and a bit disturbing) to see foreign direct investment going down so sharply. I would be interesting to know where the U.S. dollars dispersed via our trade deficit are going instead of to direct investments.
I wasn't certain of that,
Thank-you very much for providing that definition.
I would be interesting to know where the U.S. dollars dispersed via our trade deficit are going instead of to direct investments.
That becomes more difficult to trace because it gets so widely dispersed. But as I indicated in my previous post, MUCH of it "returns" when foreign nations use it to purchase debt issued by our Treasury to finance our deficit spending. In essence, our gluttonous addiction to "cheap" imports is actually subsidized by the monthly installment payments that'll burden future taxpayers. There's no such thing as a free lunch.