The dollar's slump makes scooping up US businesses and real estate a financial bargain.
The United States has become a bustling bargain basement for world investors. Using excess dollars earned as a result of the massive US trade deficit, foreigners are buying up big chunks of the nation's businesses and properties. The latest shoppers: Abu Dhabi for New York's Chrysler Building and a Belgian-Brazilian brewery for Anheuser-Busch.
"It's the single biggest transfer of wealth in the shortest period of time in the history of mankind," says Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, a group of mostly small manufacturers worried by their loss of business to foreign companies. "We can't continue to transfer US wealth at this rate."
In 2007, foreigners bought $255 billion of the worldwide existing assets of US businesses, up 72 percent from 2006. They spent another $22 billion, up 29 percent, to establish new enterprises in the US.
In a sense, America is for sale.
Foreigners have put $2 trillion into US plant and equipment ("foreign direct investment," in economic language) since 1992. Of this, $1.8 trillion, or 90 percent, is for buying up existing worldwide assets of US-based firms, notes Charles McMillion, chief economist of MBG Information Services in Washington. In other words, foreigners are purchasing not just the domestic assets of American business corporations and properties, but US assets abroad as well.