Japan’s the one that surprised me. China, India, Mexico, the Philippines— I expected those. Lots of people here sending money to the family back home from those countries. But Japan? Over a billion a year sent to the second/third largest economy in the world depending on how its calculated?
1)It is not clear if this is gross or net apparently the former;
2) if so, there are 7 billion sent to the US which would mean the total is 127 billion.
3) the article states that the total could be as much as 50% higher if untracked remittances are included. So we could be talking about 200 billion.
4)the Chinese received a large amount of interest on the US Treasury notes and bonds they hold.
5)I should also be noted that, if this money is sent in the form of actual dollars, this makes it very difficult to determine the real money supply domestically. If sent in the foreign currency less so. But we know that drug profits are sent as actual dollars and that is in the tens of billions.
Japan is receiving interest on the US debt which is the lion’s share of those moneys.
If our debt is 20 trillion we are paying out (assuming an interest rate of 3-4%)600 to 800 billion in interest each year so if 20% of that debt is held by foreigners that could be 120 billion per.
Hence, we had better be careful about taxing remittances overall since that could crash the market for US debt. Now remittance not sent by the US Treasury would not have that effect.