Foreign Investment in U.S. ‘Is a Plus,’ Greenspan Says

Federal Reserve Board Chairman Alan Greenspan told Congress today that foreign investment in the United States “is a plus,” even at current record levels.

“It is a highly desirable international trend,” Greenspan told the House-Senate Joint Economic Committee.

He said he was less worried about the fact that more and more U.S. assets are being acquired by Japanese and other foreign investors than he would be if they were simply amassing U.S. dollars.

Despite the recent increase in foreign holdings in the United States, “we still have a $50 billion greater balance in investment abroad,” Greenspan said.

Greenspan was asked by Sen. Alfonse M. D’Amato (R-N.Y.) whether he was troubled by the extent of the growing foreign investment in the United States.

“Japan is buying America and leasing it back to us,” D’Amato said.

But Greenspan responded: “I am very little concerned about the issue of foreign investment in the United States. On the contrary, integration of world economies is a desirable trend.”

“We will find that foreign investment in the United States will be a plus,” Greenspan said.

He said it was difficult to tell the exact extent of foreign holdings in the United States. In terms of U.S. Treasury securities alone, foreign investors held 16.4% of the total at the end of last year, Greenspan said.