In the most recent issue of the San Francisco Fed's Economic Letter, economist Michele Cavallo examines the effect of changes in the value of the dollar and changes in the US net international investment position (NIIP).
As Cavallo explains:
The U. S. NIIP reflects the U.S. international balance sheet. On one side of the ledger is the value of the accumulated stock of U.S. claims on foreigners; this would include, for example, the shares or bonds of, say, German firms held by U.S. residents. On the other side is the value of the accumulated stock of foreign claims on U.S. residents; this would include, for example, shares or bonds of U.S. firms held by German residents. The difference between the two is the NIIP, and when claims of foreigners on the U.S. are greater than U.S. claims on foreigners, it represents the net foreign indebtedness of the U.S. economy.
From the perspective of the US NIIP, a depreciating dollar doesn't look like such a bad deal:
... a depreciation of the dollar can improve the NIIP, as gross assets are exposed to valuation adjustments due to exchange rate movements, while gross liabilities are not; this valuation effect of exchange rate movements is equivalent to a transfer of wealth from foreign countries to the U.S. Likewise, an increase in the value of the dollar worsens the NIIP and it is equivalent to a wealth transfer from the U.S. to the foreign countries it borrows from.
Of course, this only works when you both borrow and print dollars:
The consequences of exchange rate movements for a country that borrows in dollars, as many emerging market economies do, however, are quite different. A depreciation of its own currency increases the burden of its foreign borrowing and worsens its NIIP.
And even for the US, there is no free lunch. Lenders generally don't like unpredictable redistributions of wealth, and if it keeps up will almost certainly need to be compensated for the risk. And even beyond that, as Cavallo concludes
... the valuation adjustment through exchange rates is particularly helpful in explaining short-term and medium-term changes in the NIIP—that is, over at most a couple of years. Longer-term developments in the NIIP, however, are more deeply rooted in trade and the associated condition of current accounts.
You can read the whole article here.