Summary
As of the end of the third quarter, the United States owed the rest of the world almost $5.5 trillion more than the rest of the world owed it. This represented an increase of $1.25 trillion from a year earlier -- remarkable when you consider that as recently as the mid-1980s, the United States was a net creditor nation. This and other sobering facts are contained in the latest flow-of-funds data, released yesterday by the Federal Reserve.
_____
Yesterday, the Federal Reserve released its latest flow-of-funds data, current through 9/30/05. With little comment, I am passing along tables containing the important foreign numbers, to get them into circulation as quickly as possible. A more detailed examination of these data will follow shortly, probably later this morning.
* As of 9/30, total US financial assets held by foreign investors rose to a $10.681 trillion. Net foreign financial claims against the United States stood at $5.473 trillion. As of 6/30, the respective totals were $10.469 trillion and $4.836 trillion.
* As of 9/30, foreign investors held $2.077 trillion of US Treasury debt. This was equal to 45.5% of all the Treasury's debt held by public investors. Total Treasury debt held by foreigners as of 6/30 was about $2.024 trillion, or 45.0% of all the Treasury debt held by public investors.
* During the September quarter, foreign investors ("official" and "private") acquired a net of $52.9 billion in Treasury debt. In turn, this equaled 91% of the net $58.1 billion the Treasury issued during the period.
* As of 9/30, the 15 largest foreign country/region holders of Treasury debt held a total of $1.748 trillion. The 6/30 total was $1.708 trillion.
________
Table 1.
------------------------------------------
FOREIGNERS' U.S. FINANCIAL
ASSETS/LIABILITIES
(Billions of Dollars, Latest Data
Through 09/30/05, Released 12/08/05)
------------------------------------------
Total Total
Financial Financial
Assets Liabilities Difference
------------------------------------------
2005
09/30 10680.9 5207.7 5473.2
06/30 10468.9 5232.5 4836.4
03/31 10180.5 5446.3 4734.2
------------------------------------------
As of
12/31
-----
2004 9836.2 5333.5 4502.7
2003 8380.8 4501.1 3879.7
2002 7576.8 4276.2 3300.6
2001 7065.9 3747.0 3318.9
2000 6584.9 3562.3 3022.6
=======================================
1990 2001.0 1418.1 582.9
---------------------------------------
1985 967.4 873.0 94.4
1984 805.3 836.4 -31.1
---------------------------------------
1980 494.2 660.9 -166.7
1970 104.8 140.8 -36.0
1960 38.9 63.4 -24.5
1950 17.4 30.0 -12.6
=======================================
1945 16.3 14.9 1.4
------------------------------------------
Source: "Flow of Funds Accounts
of the United States" (Federal
Reserve "Z.1" release).
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Table 2.
-----------------------------------------------
FOREIGN HOLDINGS OF US FINANCIAL ASSETS
AS OF 09/30/05 (Billions of Dollars
-- Latest Data Released 12/08/05)
-----------------------------------------------
% of
Total
Total US Financial Assets -----
Held by Foreign Investors 10680.9 100.0
===============================================
Credit-Market Instruments# 5098.7 47.7
------ ----
Open Market Paper 132.8
US Govt. Securities 2962.4
Treasury 2076.7
Agency 885.7
US Corporate Bonds 2003.5
-----------------------------------------------
US Corporate Equities 2255.2 21.1
------ ----
Credit-Market Instr.
+ Corp. Equities 7353.9 68.8
====== ====
-----------------------------------------------
Detail of US Government Securities
-----------------------------------------------
Treasury 2076.7
Official 1307.1
Private 769.6
Agency 885.7
Official 303.8
Private 581.9
------
2962.4
======
-----------------------------------------------
Source: "Flow of Funds Accounts of the United
States" (Federal Reserve "Z.1" release.) #For
the purpose of this analysis, the category
"Loans to US Corporate Business" has been ex-
cluded. As of 9/30/05, this category had tot-
al outstandings of $179.1 billion.
-----------------------------------------------
Table 3.
------------------------------------------------
15 LARGEST FOREIGN HOLDERS OF U.S.
TREASURY DEBT AS OF 09/30/05, VS. THE
SAME COUNTRIES' HOLDINGS AS OF 06/30/05
(Amounts in Billions of $s)*
------------------------------------------------
06/30 06/30
Country 2005 2005 Change
------------------------------------------------
( 1) Japan 687.3 681.2 6.1
( 2) Mainland China 252.2 243.7 8.5
( 3) United Kingdom 182.4 145.5 36.9
( 4) Caribbean Bank-
ing Centers@ 102.9 106.8 -3.9
( 5) Taiwan 71.8 71.3 0.5
( 6) Germany 63.5 61.1 2.4
( 7) Korea 61.7 59.6 2.1
( 8) OPEC 54.6 57.0 -2.4
( 9) Hong Kong 48.1 48.2 -0.1
(10) Canada 47.8 43.8 4.0
(11) Luxembourg 41.3 43.1 -1.8
(12) Switzerland 37.5 40.1 -2.6
(13) Mexico 35.0 31.9 3.1
(14) Norway 33.4 45.3 -11.9
(15) Singapore 28.2 28.9 -0.7
------------------------------------------------
Total 1747.7 1707.5 40.2
------------------------------------------------
*Estimated end-of-period foreign
holdings of US Treasury marketable
and nonmarketable bills, bonds and
notes based on Treasury Foreign
Portfolio Investment Survey bench-
marks and on monthly data reported
under the Treasury International
Capital (TIC) reporting system.
Totals comprise both official and
private holdings. Data subject to
revision. @Includes Bahamas, Ber-
muda, Cayman Islands, Netherlands
Antilles, and Panama.
------------------------------------------------
Table 4.
--------------------------------------------------------
NET ACQUISITION OF U.S. FINANCIAL ASSETS
BY FOREIGN INVESTORS -- 2000 TO 09/30/05*
(Billions of Dollar)
--------------------------------------------------------
Years Ended December 31
------------------------------ 09/30
2000 2001 2002 2003 2004 2005*
----- ----- ----- ----- ------ ------
Net Acquisition
of Finan. Assets 963.0 657.7 767.8 842.5 1307.1 1006.1
================= ===== ===== ===== ===== ====== ======
Credit-Market
Instruments
----------------
Open-Mkt. Paper 4.3 -2.6 10.3 7.0 30.6 -34.0
Treasury Sec. -70.5 10.5 138.9 288.9 358.5 211.6
Agency Sec. 141.9 103.7 112.3 6.5 104.8 225.6
Corp. Bonds 168.4 195.4 151.0 230.0 254.4 418.1
----- ----- ----- ----- ------ ------
Subtotal 244.1 307.0 412.5 532.4 748.3 821.3
----- ----- ----- ----- ------ ------
Corp. Equities 193.6 121.5 54.1 35.0 61.9 159.1
----- ----- ----- ----- ------ ------
Total 437.7 428.5 466.6 567.4 810.2 980.4
===== ===== ===== ===== ====== ======
Above/Net Acquis. 45.5% 65.2% 60.8% 67.3% 62.0% 97.4%
----- ----- ----- ----- ------ -----
MEMO ITEM@
----------------
Loans to Corp-
orate Business -2.2 -1.6 10.1 -0.8 6.3 5.5
--------------------------------------------------------
DISTRIBUTION OF TREASURY/AGENCY ACQUISITIONS
--------------------------------------------------------
Treasury Securities
--------------------------------------------------------
Official -5.2 33.7 60.5 184.9 272.7 38.2
Private -65.3 -23.2 78.4 104.0 85.8 173.4
---- ---- ----- ----- ----- -----
Total -70.5 10.5 138.9 288.9 358.5 211.6
--------------------------------------------------------
Agency Securities
--------------------------------------------------------
Official 40.9 20.9 30.5 39.9 38.5 72.8
Private 101.0 82.8 81.8 -33.4 66.3 152.8
----- ----- ----- ---- ----- -----
Total 141.9 103.7 112.3 6.5 104.8 225.6
--------------------------------------------------------
*Source: "Flow of Funds Accounts of the United
States" (Federal Reserve "Z.1" release). 3Q05
figures are at seasonally adjusted annual rates.
@Although "Loans to Corporate Business" are
classified by the Federal Reserve as "Capital
Market Instruments," they have been excluded for
the purpose of this examination, since they lack
the liquidity of the other categories.
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