Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, June 29, 1994                   TAG: 9406290121
SECTION: BUSINESS                    PAGE: B7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                 LENGTH: Medium

U.S. STILL HEADS DEBTOR NATIONS LIST

The Commerce Department said Tuesday that America's net debtor position worsened by 9.4 percent from a revised 1992 level of $507.94 billion as foreign holdings in the United States grew more than U.S. assets abroad.

Analysts said that the new report was a stark reminder that foreigners have a growing influence over Americans' economic fate. They said this influence is showing up in the current selloff of the dollar that has sent the currency's value plunging to a postwar low against the Japanese yen.

``We have lost control of our currency and our credit markets to foreigners and speculators,'' said Lawrence Chimerine, chief economist at the Economic Strategy Institute, a Washington think tank.

``If you keep running huge trade deficits at a time when no one wants to hold dollars, then you are going to put pressure on your currency,'' Chimerine said.

As recently as 1986, the United States still was considered a net creditor country with $34.6 billion more in assets overseas than foreigners owned in this country, if the assets were valued at the current cost of replacement.

However, in 1987 the United States crossed over the line to become a net debtor country for the first time since before World War I.

Simply put, that means that foreigners now own more in U.S. corporations, stocks, bonds and real estate than Americans own in overseas assets.

The total net debtor figure is, in a classic sense, not a debt, since it includes not only bank loans but all forms of investment. However, it does represent the amount that would have to be produced if for some reason foreigners suddenly decided to liquidate all of their U.S. holdings.

Analysts said that the current pressure facing the dollar indicates that many foreign investors in the U.S. stock and bond markets, particularly the Japanese, have been cashing in those investments at a greater rate this year and transferring their money to other currencies.

``The dollar is periodically vulnerable to these kinds of selling waves, because the United States requires a continuous inflow of foreign investment to offset its appetite for imports,'' said Bruce Steinberg, an economist at Merrill Lynch in New York.