The difference between the net foreign asset position of the United States and the accumulation of past current account deficits is the change in the valuation of those assets, due to changes in asset prices and in exchange rates.

Net adjustments on revaluation of

However, sustainability should be judged not only by the current account deficit but also by the net foreign asset position of the United States.

As deficits accumulate, the cost of servicing the net international asset position grows.

This puts China s net foreign assets at roughly 1.8 trillion.

The availability of the balance of unexpended resources depends on the degree of liquidity of the net assets held.

They may have overvalued some of these assets but the assets are, by and large, still there.

The current account deficit is equal to the trade deficit plus the cost of servicing the net international asset position the net rent, interest, and dividends owed to foreigners who have invested their capital in the US.

In the 1990s, the Djibouti economy deteriorated dramatically, with net external assets falling by 40 per cent.

This difficulty in valuing the now so called toxic assets remains at the core of today s credit difficulties.

Clear

(net)

Net capital inflow

Net revenue (1 200.2) (960.7) 239.5

Net total 47 818.0

Gross Net

payments a profits and interest c account d of capital e Global balance f

a Net budget.

2. Net expenditure

Total net expenditure 60 764 824 87 957 782 148 722 606

Total cost (net) 14 683 000

Net amount assessed 39 801.1

Net transfers and adjustments 17 292.4

Net expenditure 74 235 300 85 576 662 159 811 962

Net operating costs

Net amount assessed 1 370.0 139.9 1 509.9

Net amount assessed 884 268

Net amount assessed 2 507 002 171

Net other changes 1 704.5 23.2

Net amount assessed 2 414.4

Net surplus balance 70.9

Net amount assessed 495 240 923

To implement Board apos s recommendation to extend to General Service staff, as from 1 July 1995, the longer term modifications introduced effective 1 April 1992 with respect to Professional and higher category staff.

Seemed clearheaded.

4. Net assets and liabilities

Net material product of agriculture

Net service Net payments of Balance on current Net movement

Net transfers and adjustments a

Net transfers and adjustmentsb 17 292.4

Net transfers and adjustmentsc (1 638.0) 1 638.0

Net operating costs

1. Resources Gross Net

2. Net operating cost

2. Net operating costs

NET DECREASE IN LIQUIDITY Notes