The Net International Investment Position of the US

Since 2016Q4, the Net International Inestment Position of the US has become more negative.

Figure 1: US Net international investment position to GDP ratio (blue). Orange denotes Trump administration. Source: BEA (June 30) for 2006-2020, BEA (earlier releases) before 2006, BEA 2020Q2 2nd release, author’s calculations. 

As the Release notes, most of the 2020Q1 changes in assets and liabilities is driven by stock price changes, and dollar valuation changes. Even before then, the deterioration in the position was ongoing; maybe nothing to worry about. Brad Setser interpreted the trend in recent years as the US behaving like a household taking out a home equity loan…I don’t have one of those myself. But I bet there’s a limit…