1 · The current account, trade & income
The U.S. current-account balance is the sum of three parts: the balance on trade in goods & services, the primary-income balance (income earned on cross-border assets), and the smaller secondary-income balance. The shaded bands below are those three components; the bold line is the current account they sum to. It is dominated by — but not equal to — the trade balance.
2 · What foreigners buy
When the rest of the world finances the United States, it accumulates U.S. assets. Read by broad instrument — direct investment, portfolio investment, other investment — the composition of foreign-held U.S. liabilities has shifted markedly toward portfolio holdings (corporate equities and bonds) over the decades.
3 · The return reversal
Historically the United States earned a higher yield on its assets abroad than it paid foreigners on their U.S. holdings — earning more on its foreign assets than it paid on its foreign liabilities despite being a net debtor. As foreign holdings rotate toward U.S. equities, foreigners increasingly receive stock-market returns, and that historic advantage is put under pressure.
Current account, trade & borrowing
How the U.S. current account decomposes into trade, income, and transfers — and the open question of its co-movement with federal government borrowing.
Read the decomposition →Who finances the U.S., & what they buy
Foreign holdings of U.S. assets by instrument, in levels and as a share of 100% — the shift toward portfolio (equity & bond) holdings.
Into the flow of funds →The return reversal
Income receipts vs payments and the implied return differential — the empirical core of the thesis.
See the headline finding →Explore the data
An interactive explorer over every cached series, with one-click downloads in CSV, Excel, and Parquet.
Open the explorer →Comparison context for the U.K. and Germany lives under Comparison & value transfers; sources and construction are on the Methodology & Provenance page.