I could only guess when it comes to currency speculation. I don't think that our fiscal policy of constant deficits is prudent. The National Debt has increased every single year for the last 45 years. I would like to see them balance the budget and stop the bleeding. Ain't gonna happen.
The Euro has it's limits too. Europe has some serious problems in unemployment, high cost social programs, and the European demographic timebomb.
If I was going to speculate maybe I would bet on Chile, Ireland and maybe Iraq once they become stabilized. The Chinese Yuan is undervalued and pegged to the dollar by the government. That would probably be the safest bet. It can only go up in my opinion, and the worst case is that the government continues the peg and you get a return of capital instead of a return on capital.
It would be interesting to see just what currencies that Buffet is invested in.
I think that the problems that Buffet talks about are very real, and at some point we will have to confront deficits and debt.
Non of this has anything to do with long term trends. People are parking money in Euros until the Yaun is unpegged. That is it.
Good observations. Buffett's problem is in his long position on the euro. He may have taken a hit on the Yen this past month, but that won't last long. Nor will it get much better, btw.
As for the Yuan, clearly there is only up to go. I think the market has already accounted for this, so when it actually happens there won't be much surprise. The dollar will actually strengthen elsewhere as result. That may be counter-intuitive, but the way it will be. So even if Buffy is long on the Yuan, it does him no good if it strengthens, for it will only help the dollar elsewhere.
The problem currency traders have is with the euro. While smart money has gone to such places as Korea, for example, the politically-biased moves have led to euro illusion. Won't happen.