Guess Who's Buying America?

Foreign investors bought up $414 billion in American factories, businesses and financial institutions this past year, up 90 percent from just last year, according to the New York Times. 

While most people would guess it's China or the Middle East doing most of the buying, look which country is actually on top - and with more than double the investment of China and the Middle East states combined.

The full story is here.

Comments

[Zoe B]

Group these numbers:

$141.5 b = Commonwealth countries (UK, Canada, Australia)
$138.5 b = Europe (UK, Spain, Germany, Sweden, Switzerland, France)
$ 40.0 b = Arab nations (UAR, Saudi Arabia, Kuwait)
$ 30.1 b = non-white Asia (S. Korea, Singapore, China)

(note: UK has been counted twice)

The data suggest to me that 50-odd years after the Empire collapsed, Britain's global influence is growing vis a vis that of the US. I couldn't chalk all of their resilience to immigration, if only because their resident Muslim population seems more angry than ours. Tories will credit Margaret Thatcher, Laborites will tout Tony Blair. Perhaps there are synergies in being a member of the Commonwealth?

Europe as a whole is not ranked high on innovation, but they have done a good job of recovering wealth squandered in 2 World Wars.

The richer Arab nations have spent lavishly on local infrastructure and stipends to citizens/family members. What might happen if they changed their priorities to acquisition of US assets?

Asia also seems to be spending its new wealth upon itself - China is behind Singapore, and India doesn't make this list.

And while it is no news that the US and Canadian economies are entwined, Canada seems to be gaining clout even though they have higher taxes and support a greater social safety net than the US has been willing to pay for.

[Sean Bossinger]

I find the relief from this report only marginally better than my previous assumptions.

We still Need To Get Our Financial House In Order.

[Michael Wells]

Building on Zoe' good analysis. If we add Singapore to the Commonwealth, it reaches $151.4 billion (not even including Hong Kong as part of China). And if we subtract the UK from Europe, it drops to $92.7 billion.

Clearly there's something to being part of the former British Empire (which of course also includes the US). William Bernstein argues in The Birth of Plenty that the English system of law and property rights made modern capitalism and prosperity possible. Does anyone else know about this theory and have comments on it?

Tangentally, the book The Story of English tells about how English became the universal language of business, science, navigation, etc. While I don't think it's a cause, it doesn't hurt to have the most vibrant economies able to talk to one another.

I suspect Canada's growing clout here has less to do with taxes than the strength of the Loonie vs the Greenback. (Bernstein also talks about the level where taxes start to affect economic growth. He puts it around 33% and says that the US is pushing the lower limit where needed services decline and and the Scandanavian countries are pushing the upper limit -- and that too high and too low both can undermine the economy.)

[DR]

The best part of that article is that they get the info from a Canadian company.