c2, as you have brought up the issue of the non-contribution of US-owned foreign assets to our GDP (in the context of how that might skew the current apparently high stock market-to-GDP ratio), and as i have rebutted by stating that US-owned foreign assets are much less than foreign-owned US assets, i thought you might find the following stats of interest...
#reply-17660069
In 1985, the international investment position of the United States went into negative territory for the first time. Foreign-owned assets in the United States of $1,061 billion compared with U.S.-owned assets abroad of $949 billion, for a net of negative $111 billion.
At year-end 2000, the market value of foreign holdings amounted to almost 10 times the amount of 1985: $9,377 billion, vs. U.S.-owned assets abroad of $7,189 billion, resulting in net foreign indebtedness of $2,187 billion. With another deficit in the current account of $417 billion and continuing increases in the current year, net foreign indebtedness is rapidly approaching $3,000 billion.
We mention these figures in particular for two reasons: first, because they are widely unknown; and second, they provide some idea of the fantastic magnitude of the forces that may come into operation once the dollar's invincibility comes into question...
Considering the astronomic size of foreign dollar holdings that have accumulated in past years, the stage is definitely set for a bandwagon against the dollar. And its trigger is just as obvious: growing disillusionment about the U.S. economy and its asset markets. |
