The international investment position of the United States at the end of the second quarter of 2013.

Nguyen, Elena L.

THE NET international investment position of the United States at the end of the second quarter of 2013 was -$4,504. (1) billion (preliminary), compared with -$4,236.6 billion (revised) at the end of the first quarter (chart 1, table The $267.6 billion decrease in the net position reflected a $605.8 billion decrease in the value of U.S.-owned assets abroad that exceeded a $338.2 billion decrease in the value of foreign-owned assets in the United States. The net position decreased 6 percent in the second quarter, compared with a 10 percent decrease in the first quarter and an average quarterly decrease of 8 percent from the first quarter of 2011 through the first quarter of 2013.

U.S.-owned assets abroad. U.S.-owned assets abroad were $20,984.3 billion at the end of the second quarter, compared with $21,590.1 billion at the end of the first quarter (chart 2). The $605.8 billion decrease reflected a $423.3 billion decrease in the value of financial derivatives and a $182.5 billion decrease in the value of U.S.-owned assets abroad excluding financial derivatives.

[GRAPHIC 1 OMITTED]

U.S.-owned assets abroad excluding financial derivatives were $18,159.2 billion at the end of the second quarter, compared with $18,341.7 billion at the end of the first quarter. The $182.5 billion decrease reflected a $292.1 billion decrease resulting from valuation changes that was partly offset by a $109.6 billion increase resulting from financial outflows. (2) Valuation changes were mostly attributable to decreases in gold prices that lowered the market value of U.S. government gold and decreases in foreign stock and bond prices that lowered the value of U.S. holdings of foreign securities.

[GRAPHIC 2 OMITTED]

Foreign-owned assets in the United States. Foreign-owned assets in the United States were $25,488.4 billion at the end of the second quarter, compared with $25,826.6 billion at the end of the first quarter. The $338.2 billion decrease reflected a $442.6 billion decrease in the value of financial derivatives that was partly offset by a $104.4 billion increase in the value of foreign-owned assets in the United States excluding financial derivatives.

Foreign-owned assets in the United States excluding financial derivatives were $22,722.7 billion at the end of the second quarter compared with $22,618.3 billion at the end of the first quarter. The $104.4 billion increase reflected a $179.3 billion increase resulting from financial inflows that was partly offset by a $74.9 billion decrease resulting from valuation changes. Valuation changes were mostly attributable to decreases in U.S. bond prices that were partly offset by increases in U.S. stock prices.

Revisions

The U.S. net international investment position at the end of the first quarter was revised to -$4,236.6 billion from a previously published value of -$4,277.1 billion. The $40.6 billion upward revision to the net position reflected a $69.1 billion downward revision to foreign-owned assets in the United States that exceeded a $28.5 billion downward revision to U.S.-owned assets abroad.

U.S.-owned assets abroad at the end of the first quarter were revised to $21,590.1 billion from $21,618.6 billion. Foreign-owned assets in the United States were revised to $25,826.6 billion from $25,895.7 billion. These revisions reflect revised source data from the Treasury International Capital reporting system and from BEA's quarterly surveys of direct investment.

Valuing the Components of the U.S. International Investment Position

Investment positions for long-term portfolio securities are based on market values from monthly, annual, and benchmark surveys conducted by the Treasury International Capital (TIC) reporting system of the U.S. Department of the Treasury. Investment positions for financial derivatives are based on fair market values from quarterly surveys conducted by the TIC reporting system. Investment positions for claims and liabilities reported by banks, securities brokers, and other nonbanks are based on contractual (face) values of instruments as reported by financial institutions for both their own accounts and the accounts of their customers on the monthly and quarterly TIC surveys with supplementary data for U.S. nonbanks from foreign central banks.

Investment positions for direct investment are valued at current-period prices based on a revaluation of book values. Book values are reported by U.S. multinational companies on surveys conducted by BEA. Direct invest ment at current cost is BEAs featured measure of direct investment at current-period prices. (1a) The current-cost method values the U.S. and foreign parent shares of their affiliates' investment in (1) plant and equipment using the current cost of capital equipment, (2) land using general price indexes, and (3) inventories using estimates of their replacement cost. (2a)

(1a.) BEA publishes direct investment at market value as an alternative current-period price measure with owners' equity revalued using indexes of stock market prices. BEA also publishes direct investment at historical cost with owners' equity at the book value reported on BEA's surveys. Country and industry detail for direct investment are available only on a historical-cost basis; these statistics are available in interactive tables at www.bea.gov under "International."

(2a.) For additional information on the current-cost and market-value methods, see J. Steven Landefeld and Ann M. Lawson, "Valuation of the U.S. Net International Investment Position," Survey of Current Business 71 (May 1991): 40-49.

(1.) For comprehensive international investment position statistics, including annual statistics beginning with 1976 and quarterly statistics beginning with the fourth quarter of 2005, see the table "International Investment Position, 1976-2003" at www.bea.gov.

(2.) For statistics on financial flows, see the financial account transactions in table 1 in the "U.S. International Transactions" article in this issue of the Survey of Current Business. Detailed valuation changes such as price, exchange rate, and other changes are only available for annual statistics.

Table 1. International Investment Position of the United States
at the End of the Quarter (1)

[Millions of dollars, not seasonally adjusted]

Line   Type of investment                    2012

                                              I            II

1      Net international investment       -3,886,446   -4,332,158
         position of the United
         States (lines 2+3)
2          Financial derivatives,             76,286       67,589
             net (line 5 less
             line 25)
3          Net international              -3,962,732   -4,399,747
             investment position,
             excluding financial
             derivatives (line 6
             less line 26)
4          U.S.-owned assets              21,349,048   20,948,183
             abroad (lines 5+6)
5              Financial derivatives       3,950,239    4,155,820
                 (gross positive
                 fair value)
6              U.S.-owned assets          17,398,809   16,792,363
                 abroad, excluding
                 financial
                 derivatives (lines
                 7+12+17)
7              U.S. official reserve         572,578      556,620
                 assets
8                  Gold (2)                  434,742      418,006
9                  Special drawing            55,460       54,341
                     rights
10                 Reserve position           31,436       33,930
                     in the
                     International
                     Monetary Fund
11                 Foreign currencies         50,940       50,343
12         U.S. government assets,           127,814      111,164
             other than official
             reserve assets
13             U.S. credits and other         80,642       82,500
                 long-term assets (3)
14                 Repayable in               80,369       82,227
                     dollars
15                 Other (4)                     273          273
16             U.S. foreign currency          47,172       28,664
                 holdings and U.S.
                 short-term assets (5)
17         U.S. private assets            16,698,417   16,124,579
18           Direct investment at          4,759,096    4,826,428
               current cost
19           Foreign securities            6,999,263    6,662,323
20               Bonds                     1,960,498    1,946,486
21               Corporate stocks          5,038,765    4,715,837
22           U.S. claims on                  869,251      845,301
               unaffiliated foreigners
               reported by U.S.
               nonbanking concerns
23           U.S. claims reported by       4,070,807    3,790,527
               U.S. banks and
               securities brokers,
               not included elsewhere
24     Foreign-owned assets in the        25,235,494   25,280,341
         United States (lines 25+26)
25         Financial derivatives           3,873,953    4,088,231
             (gross negative fair
             value)
26         Foreign-owned assets in        21,361,541   21,192,110
             the United States,
             excluding financial
             derivatives (lines 27+34)
27         Foreign official assets         5,428,122    5,496,057
             in the United States
28             U.S. government             4,316,906    4,400,470
                 securities
29                 U.S. Treasury           3,722,551    3,857,872
                     securities
30                 Other                     594,355      542,598
31             Other U.S. government         123,406      125,065
                 liabilities (6)
32             U.S. liabilities              191,515      191,921
                 reported by U.S.
                 banks and securities
                 brokers, not included
                 elsewhere
33             Other foreign official        796,295      778,601
                 assets
34         Other foreign assets           15,933,419   15,696,053
35           Direct investment at          2,913,781    2,976,814
               current cost
36           U.S. Treasury securities      1,425,087    1,455,648
37           U.S. securities other         6,608,954    6,491,227
               than U.S. Treasury
               securities
38               Corporate and other       2,927,923    2,887,851
                   bonds
39               Corporate stocks          3,681,031    3,603,376
40           U.S. currency                   415,143      422,259
41           U.S. liabilities to             683,453      680,186
               unaffiliated foreigners
               reported by U.S.
               nonbanking concerns
42           U.S. liabilities              3,887,001    3,669,919
               reported by U.S. banks
               and securities brokers,
               not included elsewhere
       Memoranda:
43     Direct investment abroad at         4,975,809    4,679,267
         market value
44     Direct investment in the            3,855,543    3,764,768
         United States at market value
45     Direct investment abroad at         4,169,123    4,224,965
         historical cost
46     Direct investment in the United     2,529,479    2,585,115
         States at historical cost

Line   Type of investment                    2012

                                             III           IV

1      Net international investment       -4,109,198   -3,863,892
         position of the United
         States (lines 2+3)
2          Financial derivatives,             52,493       57,776
             net (line 5 less
             line 25)
3          Net international              -4,161,691   -3,921,668
             investment position,
             excluding financial
             derivatives (line 6
             less line 26)
4          U.S.-owned assets              21,551,595   21,637,618
             abroad (lines 5+6)
5              Financial derivatives       3,925,606    3,619,761
                 (gross positive
                 fair value)
6              U.S.-owned assets          17,625,989   18,017,857
                 abroad, excluding
                 financial
                 derivatives (lines
                 7+12+17)
7              U.S. official reserve         606,277      572,368
                 assets
8                  Gold (2)                  464,422      433,434
9                  Special drawing            55,232       55,050
                     rights
10                 Reserve position           35,248       34,161
                     in the
                     International
                     Monetary Fund
11                 Foreign currencies         51,375       49,723
12         U.S. government assets,            95,958       93,570
             other than official
             reserve assets
13             U.S. credits and other         82,691       84,029
                 long-term assets (3)
14                 Repayable in               82,418       83,756
                     dollars
15                 Other (4)                     273          273
16             U.S. foreign currency          13,267        9,541
                 holdings and U.S.
                 short-term assets (5)
17         U.S. private assets            16,923,754   17,351,919
18           Direct investment at          4,983,377    5,077,750
               current cost
19           Foreign securities            7,159,326    7,531,223
20               Bonds                     2,052,037    2,140,685
21               Corporate stocks          5,107,289    5,390,538
22           U.S. claims on                  845,865      844,752
               unaffiliated foreigners
               reported by U.S.
               nonbanking concerns
23           U.S. claims reported by       3,935,186    3,898,194
               U.S. banks and
               securities brokers,
               not included elsewhere
24     Foreign-owned assets in the        25,660,793   25,501,510
         United States (lines 25+26)
25         Financial derivatives           3,873,113    3,561,985
             (gross negative fair
             value)
26         Foreign-owned assets in        21,787,680   21,939,525
             the United States,
             excluding financial
             derivatives (lines 27+34)
27         Foreign official assets         5,640,245    5,692,448
             in the United States
28             U.S. government             4,487,789    4,526,896
                 securities
29                 U.S. Treasury           3,958,112    4,032,204
                     securities
30                 Other                     529,677      494,692
31             Other U.S. government         127,657      128,279
                 liabilities (6)
32             U.S. liabilities              198,987      204,401
                 reported by U.S.
                 banks and securities
                 brokers, not included
                 elsewhere
33             Other foreign official        825,812      832,872
                 assets
34         Other foreign assets           16,147,435   16,247,077
35           Direct investment at          3,029,271    3,057,326
               current cost
36           U.S. Treasury securities      1,517,253    1,541,569
37           U.S. securities other         6,794,000    6,904,050
               than U.S. Treasury
               securities
38               Corporate and other       3,008,379    3,061,963
                   bonds
39               Corporate stocks          3,785,621    3,842,087
40           U.S. currency                   438,415      454,227
41           U.S. liabilities to             678,508      656,522
               unaffiliated foreigners
               reported by U.S.
               nonbanking concerns
42           U.S. liabilities              3,689,988    3,633,383
               reported by U.S. banks
               and securities brokers,
               not included elsewhere
       Memoranda:
43     Direct investment abroad at         5,058,812    5,249,539
         market value
44     Direct investment in the            3,961,992    3,923,969
         United States at market value
45     Direct investment abroad at         4,370,424    4,453,307
         historical cost
46     Direct investment in the United     2,630,175    2,650,832
         States at historical cost

Line   Type of investment                    2013

                                            I (r)        II (p)

1      Net international investment       -4,236,559   -4,504,121
         position of the United
         States (lines 2+3)
2          Financial derivatives,             40,025       59,352
             net (line 5 less
             line 25)
3          Net international              -4,276,584   -4,563,473
             investment position,
             excluding financial
             derivatives (line 6
             less line 26)
4          U.S.-owned assets              21,590,055   20,984,263
             abroad (lines 5+6)
5              Financial derivatives       3,248,377    2,825,067
                 (gross positive
                 fair value)
6              U.S.-owned assets          18,341,678   18,159,196
                 abroad, excluding
                 financial
                 derivatives (lines
                 7+12+17)
7              U.S. official reserve         553,058      446,207
                 assets
8                  Gold (2)                  417,941      311,707
9                  Special drawing            53,704       53,881
                     rights
10                 Reserve position           34,039       33,860
                     in the
                     International
                     Monetary Fund
11                 Foreign currencies         47,374       46,759
12         U.S. government assets,            94,016       90,116
             other than official
             reserve assets
13             U.S. credits and other         85,433       87,846
                 long-term assets (3)
14                 Repayable in               85,160       87,573
                     dollars
15                 Other (4)                     273          273
16             U.S. foreign currency           8,583        2,270
                 holdings and U.S.
                 short-term assets (5)
17         U.S. private assets            17,694,604   17,622,873
18           Direct investment at          5,123,775    5,200,421
               current cost
19           Foreign securities            7,823,264    7,710,167
20               Bonds                     2,174,582    2,088,771
21               Corporate stocks          5,648,682    5,621,396
22           U.S. claims on                  906,061      999,115
               unaffiliated foreigners
               reported by U.S.
               nonbanking concerns
23           U.S. claims reported by       3,841,504    3,713,170
               U.S. banks and
               securities brokers,
               not included elsewhere
24     Foreign-owned assets in the        25,826,614   25,488,384
         United States (lines 25+26)
25         Financial derivatives           3,208,352    2,765,715
             (gross negative fair
             value)
26         Foreign-owned assets in        22,618,262   22,722,669
             the United States,
             excluding financial
             derivatives (lines 27+34)
27         Foreign official assets         5,814,441    5,740,705
             in the United States
28             U.S. government             4,561,428    4,460,227
                 securities
29                 U.S. Treasury           4,090,723    4,009,164
                     securities
30                 Other                     470,705      451,063
31             Other U.S. government         128,554      131,965
                 liabilities (6)
32             U.S. liabilities              224,462      215,161
                 reported by U.S.
                 banks and securities
                 brokers, not included
                 elsewhere
33             Other foreign official        899,997      933,352
                 assets
34         Other foreign assets           16,803,821   16,981,964
35           Direct investment at          3,074,647    3,110,911
               current cost
36           U.S. Treasury securities      1,631,056    1,591,438
37           U.S. securities other         7,296,277    7,296,994
               than U.S. Treasury
               securities
38               Corporate and other       3,056,573    2,969,464
                   bonds
39               Corporate stocks          4,239,704    4,327,530
40           U.S. currency                   459,184      468,670
41           U.S. liabilities to             632,919      651,864
               unaffiliated foreigners
               reported by U.S.
               nonbanking concerns
42           U.S. liabilities              3,709,738    3,862,087
               reported by U.S. banks
               and securities brokers,
               not included elsewhere
       Memoranda:
43     Direct investment abroad at         5,500,811    5,429,676
         market value
44     Direct investment in the            4,251,181    4,342,813
         United States at market value
45     Direct investment abroad at         4,499,331    4,575,978
         historical cost
46     Direct investment in the United     2,668,153    2,704,417
         States at historical cost

Line   Type of investment                    Change:
                                          2013:1-2013:II

1      Net international investment       -267,562
         position of the United
         States (lines 2+3)
2          Financial derivatives,           19,327
             net (line 5 less
             line 25)
3          Net international              -286,889
             investment position,
             excluding financial
             derivatives (line 6
             less line 26)
4          U.S.-owned assets              -605,792
             abroad (lines 5+6)
5              Financial derivatives      -423,310
                 (gross positive
                 fair value)
6              U.S.-owned assets          -182,482
                 abroad, excluding
                 financial
                 derivatives (lines
                 7+12+17)
7              U.S. official reserve      -106,851
                 assets
8                  Gold (2)               -106,234
9                  Special drawing             177
                     rights
10                 Reserve position           -179
                     in the
                     International
                     Monetary Fund
11                 Foreign currencies         -615
12         U.S. government assets,          -3,900
             other than official
             reserve assets
13             U.S. credits and other        2,413
                 long-term assets (3)
14                 Repayable in              2,413
                     dollars
15                 Other (4)                     0
16             U.S. foreign currency        -6,313
                 holdings and U.S.
                 short-term assets (5)
17         U.S. private assets             -71,731
18           Direct investment at           76,646
               current cost
19           Foreign securities           -113,097
20               Bonds                     -85,811
21               Corporate stocks          -27,286
22           U.S. claims on                 93,054
               unaffiliated foreigners
               reported by U.S.
               nonbanking concerns
23           U.S. claims reported by      -128,334
               U.S. banks and
               securities brokers,
               not included elsewhere
24     Foreign-owned assets in the        -338,230
         United States (lines 25+26)
25         Financial derivatives          -442,637
             (gross negative fair
             value)
26         Foreign-owned assets in         104,407
             the United States,
             excluding financial
             derivatives (lines 27+34)
27         Foreign official assets         -73,736
             in the United States
28             U.S. government            -101,201
                 securities
29                 U.S. Treasury           -81,559
                     securities
30                 Other                   -19,642
31             Other U.S. government         3,411
                 liabilities (6)
32             U.S. liabilities             -9,301
                 reported by U.S.
                 banks and securities
                 brokers, not included
                 elsewhere
33             Other foreign official       33,355
                 assets
34         Other foreign assets            178,143
35           Direct investment at           36,264
               current cost
36           U.S. Treasury securities      -39,618
37           U.S. securities other             717
               than U.S. Treasury
               securities
38               Corporate and other       -87,109
                   bonds
39               Corporate stocks           87,826
40           U.S. currency                   9,486
41           U.S. liabilities to            18,945
               unaffiliated foreigners
               reported by U.S.
               nonbanking concerns
42           U.S. liabilities              152,349
               reported by U.S. banks
               and securities brokers,
               not included elsewhere
       Memoranda:
43     Direct investment abroad at         -71,135
         market value
44     Direct investment in the             91,632
         United States at market value
45     Direct investment abroad at          76,647
         historical cost
46     Direct investment in the United      36,264
         States at historical cost

(p) Preliminary

(r) Revised

(1.) The statistics for each quarter are the values as of the last
day of the quarter; the first quarter ends on March 31; the second
quarter ends on June 30; the third quarter ends on September 30;
and the fourth quarter ends on December 31 of the year.

(2.) U.S. official gold stock is valued at market price.

(3.) Also includes paid-in capital subscriptions to international
financial institutions and outstanding amounts of miscellaneous
claims that have been settled through international agreements to
be payable to the U.S. government over periods in excess of 1 year.
Excludes World War I debts that are not being serviced.

(4.) Includes indebtedness that the borrower may contractually, or
at its option, repay with its currency, with a third country's
currency, or by delivery of materials or transfer of services.

(5.) Includes foreign-currency-denominated assets obtained through
temporary reciprocal currency arrangements between the Federal
Reserve System and foreign central banks. These assets are included
in the investment position at the dollar value established at the
time they were received, reflecting the valuation of these assets in
the Federal Reserve System's balance sheet. Changes in exchange
rates do not affect this valuation.

(6.) Includes U.S. government liabilities associated with military
sales contracts and U.S. government reserve-related liabilities
from allocations of special drawing rights (SDRs).

Source: Bureau of Economic Analysis