The U.S. net international investment position at yearend 2007 was
-$2,441.8 billion (preliminary), as the value of foreign investments in the
United States continued to exceed the value of U.S. investments abroad (table
1).  At yearend 2006, the U.S. net international investment position was
-$2,225.8 billion (revised).

      The -$216.0 billion change in the U.S. net investment position from
yearend 2006 to yearend 2007 reflected net foreign acquisitions of financial
assets in the United States that substantially exceeded net U.S. acquisitions
of financial assets abroad.  The impact of this disparity was partly offset by
large exchange-rate changes resulting from strong appreciation of most major
foreign currencies against the U.S. dollar, which raised the dollar value of
U.S.-owned assets abroad, and by price appreciation of U.S.-held foreign stocks
that surpassed by a large amount the price appreciation of foreign-held U.S.
stocks.


      The following are highlights for 2007:

*     Foreign acquisitions of financial assets in the United States, excluding
      financial derivatives, were $2,057.7 billion in 2007, down slightly from
      acquisitions of $2,061.1 billion in 2006.  In 2007, net foreign private
      purchases of U.S. securities and increases in liabilities reported by
      U.S. banks were especially strong.  Net foreign official acquisitions of
      U.S. assets and foreign direct investment in the United States remained
      robust.

*     U.S. acquisitions of financial assets abroad, excluding financial
      derivatives, were $1,289.9 billion in 2007, up slightly from acquisitions
      of $1,251.7 billion in 2006.  In 2007, increases in claims reported by
      U.S. banks and U.S. direct investment abroad were especially strong.  Net
      U.S. purchases of foreign securities declined somewhat but remained
      robust.

*     Appreciation of most major foreign currencies against the U.S. dollar
      from yearend 2006 to yearend 2007 substantially raised the dollar value
      of U.S.-owned assets abroad, especially the value of U.S.-owned foreign
      stocks.

*     Price appreciation in most foreign stock markets increased the value of
      U.S. holdings of foreign stocks by a large amount.  Price appreciation in
      the U.S. stock market also increased the value of foreign holdings of
      U.S. stocks, but by a much smaller amount.


      U.S.-owned assets abroad increased $3,258.7 billion to $17,640.0 billion.

      U.S. holdings of financial derivatives with positive fair value increased
$1,045.6 billion to $2,284.6 billion.

      U.S. holdings of foreign securities increased $1,044.2 billion to
$6,648.7 billion.  Holdings of foreign stocks increased as a result of foreign-
currency appreciation, price appreciation, and net U.S. purchases.  Holdings of
foreign bonds increased mostly as a result of net U.S. purchases.

      Claims on foreigners reported by U.S. banks increased $679.4 billion to
$3,826.2 billion.

      The stock of U.S. direct investment abroad at current cost increased
$396.9 billion to $3,332.8 billion, mostly as a result of net financial flows
(see box).

      Claims on unaffiliated foreigners reported by U.S. nonbanking concerns
increased $12.9 billion to $1,176.0 billion.

      U.S. official reserve assets increased $57.4 billion to $277.2 billion.

      U.S. government assets other than official reserve assets increased $22.3
billion to $94.5 billion.


      Foreign-owned assets in the United States increased $3,474.7 billion to
$20,081.8 billion.

      U.S. holdings of financial derivatives with negative fair value increased
$1,021.9 billion to $2,201.1 billion.

      Foreign official assets in the United States increased $511.4 billion to
$3,337.0 billion.

      Foreign private holdings of U.S. securities other than U.S. Treasury
securities increased $760.1 billion to $6,132.4 billion.  Foreign holdings of
U.S. bonds increased mostly as a result of net foreign purchases.  Foreign
holdings of U.S. stocks increased as a result of net foreign purchases and
price appreciation.

      Liabilities to private foreigners reported by U.S. banks increased $591.9
billion to $4,022.2 billion.

      The stock of foreign direct investment in the United States at current
cost increased $271.2 billion to $2,422.8 billion, mostly as a result of net
financial flows (see box below).

      Foreign private holdings of U.S. Treasury securities increased $166.9
billion to $734.8 billion as a result of especially strong net foreign
purchases.

      Liabilities to unaffiliated foreigners reported by U.S. nonbanking
concerns increased $162.0 billion to $959.5 billion.

      U.S. currency held by foreigners decreased $10.7 billion to $272.0
billion.

_______________________________________________________________________________
                    Valuation Methods for Direct Investment

      Direct investment at current cost is BEA's featured measure of direct
investment in current-period prices.  The current-cost method values the U.S.
and foreign parents' share of their affiliates' investment in plant and
equipment using the current cost of capital equipment, in land using general
price indexes, and in inventories using estimates of their replacement cost.

      Direct investment at market value is an alternative measure of direct
investment in current-period prices.  The market-value method values the
owners' equity component of the direct investment position using indexes of
stock market prices.

      The historical-cost method values assets and liabilities at their book
value.  Country and industry detail can be shown only under this method.  Data
on this basis are not presented in this release.
_______________________________________________________________________________




                            *          *          *

                                   Revisions

      The previously published U.S. net international investment position at
yearend 2006 was -$2,539.6 billion.  The revised position estimates reflect the
incorporation of results from BEAs benchmark survey of U.S. direct investment
abroad for 2004, and the incorporation of results from the U.S. Treasury
Departments benchmark survey of securities claims for December 2006 and annual
survey of securities liabilities for June 2007.  The U.S. net investment
position was also revised for 1976-2006 as a result of improved estimates of
U.S. currency shipments.

      In addition to the inclusion of benchmark and improved source data,
estimates were revised to incorporate newly available or revised quarterly
source data.  Revisions attributable to these updated source data were for 2002-
2006.  The net result of revisions from all sources lowered the U.S. net
international investment position by small amounts for 2002-2004, and by much
larger amounts for 2005 and 2006.

      A more detailed discussion of the U.S. net international investment
position at yearend 2007 and revised historical data will appear in the July
issue of the Survey of Current Business.  That issue will also contain an
article about historical-cost direct investment positions, with detail by
country and industry, and revised direct investment historical data.


                            *          *          *


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