President Donald Trump's business war has focused on Wall Street's greatness on the current American account deficit, or the balance between imports and shipping. But there is another metric worth following that can exacerbate financial risks.
According to Kevin Ford, the FX and Macro strategy in Convera, the country's international investment position (NIIP) is often overlooked.
It measures how much America owns abroad against how much the world owns America, he said in a letter last week, describing it as a financial symbol of America and the rest of the world. And with that mark, America is in red for about $ 26 trillion, or about 80% of GDP.
“That means foreign investors hold more than American assets than Americans hold abroad,” Ford added. “It is a configuration that works well when the nerve is high, but in shaky times like 2025, it can be a pressure cooker.”
Indeed, times have become shaky. The American dollar is low 10% so far this year as Trump's “liberation day” shock continues to come back, causing doubts about American assets that were immediately considered reliable.
In fact, the year -of -year -old is worse since America changed to a free exchange rate in 1973, completely ending the second world war system under the Bretton Woods agreement.
At the same time, a law that would increase the trillion dollars for financial shortages continues in Congress, stimulating more concern among foreign investors, especially those who hold the debt.
Keep it all together, and this year has been an example of how a negative NIIP profile can promote the currency, Ford warned.
“And because most of the capital proposing the American financial system is coming out of the country, even minor changes in emotions can lead to major explosions,” he added. “That's a lot of dollars sold, and few bought, and voilà, greenback stumbles.”
Rotating back in the example of a financial logo, Ford explained that the problem of considering the current account deficit is that it only shows the flow of transactions, ie imports against exports.
On the contrary, NIIP shows a general bunch of debt -and ignore it would be like judging the person's use of use without looking at the balance of their credit card, he said, making the honesty “your most important property.”
“Yes, business shortages, interest rates, and all fed signs play a role, but Niip tells you how clear it is in America when things go aside,” Ford concluded. “It is a structural danger to calm down the face, ready to promote shock. And in a year like this, it has been screaming, not whispering.”
Wanting confidence in dollars has fueled investors and central banks around the world Upload on goldwhich has increased prices in recent years and especially this year, increasing 21% in 2025.
The endless push of federal reserve chairman Jerome Powell to reduce interest rates also has weakening the dollar soon.
While many on Wall Street see the most likely ahead of the dollar, the AI Boom that still draws billions in world investment passing through America It provides a certain hope of relief.