External debt: Liabilities to foreigners

The gross U.S. liabilities to foreigners was $16.3 trillion at the end 2006. Here are the main activities that lead to increased foreign debt. When the amount of imports is larger then the amount of exports. When there is an increase  in foreign holdings of U.S. debt instruments like government bonds. When foreigners buy more property in the U.S. then Americans buy property overseas. When the effects of the floating exchange rate system don't favor the U.S.

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