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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: rz who wrote (41399)11/14/2003 12:21:53 AM
From: Mark Adams  Read Replies (1) of 74559
 
Thanks. I'll check it out. Was a bit absorbed in the Fed Z.1 report this am. Had to break it off so I could enjoy a bit of sun while it lasted.

A sample of the work in progress;

Per Table L.10, the personal sector Financial assets Q203 run 28.5 trillion vs 12.7 trillion Total liabilities.

Note that 'Total liabilities' includes mortgage and credit card debt.

Note that 'Financial' does not include real things like buildings, livestock and so forth.

To put a 500 billion net purchase of 'American' assets by 'Rest of World' into perspective:


28.5t - 12.7t
 -----------        -> roughly 31 years 
    .5t/y

to deplete the 'Personal Sector' 'Financial' stock.

Another concern is the cost of servicing what we now owe the world- a flow.

If we move on to look at Table F.6 (F for Flows) lines 33-35, we see that if we net out what we pay ROW and what ROW pays us, the sum runs low digit billions.

33 Net U.S. income receipts from rest of the world 

1998  1999  2000  2001   2002
-3.5  22.7  23.4   22.0  -9.6


In other words, the debt service burden of what the ROW owns isn't material, yet. What we pay ROW is offset by what ROW is paying us, despite a 2.5 trillion imbalance in FDI. (This is the accumulation of ROW investing/buying more US assets than US buying ROW assets.)
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