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Buffett: Billionaire Warns That U.S. Trade Gap Undermines Dollar
Forbes ^
| 20JAN05
| Greg Levine
Posted on 01/21/2005 5:17:57 PM PST by familyop
NEW YORK - Doers and doings in business, entertainment and technology:
Heed the Sage of Omaha. Warren Buffett, whose investment acumen seems unerring, had a caveat for America: Barring "a major change" in policies, the trade deficit will further undermine the U.S. dollar. The billionaire spoke in a Wednesday interview with CNBC, the cable TV news channel owned by General Electric (nyse: GE - news - people ). Without shifting current trade policy, "I don't see how the dollar avoids going down," he mused, warning of inflation risks posed by an anemic Yankee currency. The prairie-born genius also confessed he's having a "hard time" identifying stocks to buy, and isn't purchasing commodities. His cash swelled to $43 billion in the third quarter, by one account, because he couldn't find many investment opportunities. Buffett, 74, is chairman of Berkshire Hathaway (nyse: BRKa - news - people ), the immensely successful investment vehicle that acquired a new--and immensely successful--board member in December: Microsoft (nasdaq: MSFT - news - people ) Chairman Bill Gates. The latter also enjoys a personal friendship with Buffett, and takes part in his bridge games. (see: "Gates: Buffett's Pal Bill Elected To Berkshire's Board")
TOPICS: Business/Economy
KEYWORDS: buffett; currency; dollar; falling; now; trade; usd
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To: Betaille
Not the reason but the two situations are both occuring. The trade deficit is growing fast AND the dollar is losing it's value. But we can just make more dollars as we like they say. Imagine the wild inflation if dollars weren't being taken out of our economy at the rate they are.
41
posted on
01/21/2005 8:11:26 PM PST
by
FITZ
To: jackbill
"...but the Fed Rate has been extremely low for years, and it hasn't helped a bit."
You have a good point. Here's a little example (something I have studied more) about why.
I love my daughter-in-law, because she's my daughter-in-law.
But she received her bachelor's in business administration. She sought those high paying jobs the University told her about, and she did look in major cities. Even with placement help, she was told by all that the market for such graduates in accounting jobs is saturated. She's cheap, whether she likes it or not.
Did she seek other graduates to get a new charter and make a go at it? No. Of course not. Men, almost exclusively, have it in them to invent things and start new businesses. I don't fault her for that.
So she nearly has her masters degree in business administration now, and still, she has no desire to compete. She's also a radical, angry Democrat voter by way of our corporate funded social leftism in the universities. She's everything that our powers-that-be want in employees--non-competitive and cheap. I do hope very much, though, that she does one thing that most like her do not do. I hope that she stays with her marriage.
42
posted on
01/21/2005 8:27:28 PM PST
by
familyop
To: familyop
I follow three of the four major currency pairs on forex. The consensus
of analysts in the UK and the US is that the dollar has yet to find the
bottom and expect further declines through at least the first half of the
year. Since Warren Buffett has chimed in perhaps that marks the point
where everybody has the news that the dollar will go lower. Usually when
everyone in a market or coming to a market has the news is when a market
turns, having exhausted it's run.
43
posted on
01/21/2005 8:37:09 PM PST
by
Zon
(Honesty outlives the lie, spin and deception -- It always has -- It always will.)
To: Americalover
Frankly, I prefer religious bears to secular ones, myself. They're the ones that are so scary, everybody gets religion all at once!!!
44
posted on
01/21/2005 8:51:11 PM PST
by
SierraWasp
(Moderates, are just too chicken to commit to any ideal!!! They prefer sophisticated sophistry...)
To: OneTimeLurker
re. J&J billions repatriation
They are repatriating money but it doesn't mean they are creating new jobs. Another special interest giveaway? Nah.
Oh, come on. If job creation was the purpose they wouldn't have done it. They did it for the profits. Period.
The irony of your post is that these corporations are bringing money back to the US from places that demand that money go to workers, which only encourages less employment.
45
posted on
01/21/2005 8:55:30 PM PST
by
nicollo
To: familyop
"His cash swelled to $43 billion in the third quarter, by one account, because he couldn't find many investment opportunities. "Too darn bad!
46
posted on
01/21/2005 11:02:44 PM PST
by
endthematrix
(Declare 2005 as the year the battle for freedom from tax slavery!)
To: endthematrix
You would think with the weak dollar, Poor Warren could find some investment opportunities in Europe????
Seems to me he's talking out of both sides of his mouth. Growing economy with trade deficit bad, stagnant economy with trade surplus bad. Poor thing, what is a billionaire to do?
47
posted on
01/22/2005 2:22:10 AM PST
by
Chgogal
To: SierraWasp
LOL. I know my that bear is sending me to church these days, which means he couldn't be secular, my mistake.
To: M. Espinola
My thoughts exactly. What game is Warren playing? He's sitting on $43 billion cash with no game plan? I find that so hard to believe. And why would he make such statements? I don't get it.
Regarding all your comments on Iran, I must say we do live in interesting times. BTW great posts and comments.
49
posted on
01/25/2005 2:53:39 AM PST
by
Chgogal
To: hubbubhubbub
But what the trade/gap deficit really means is that capital (and with it jobs) is flowing out of the U.S. Now you may call that meaningless but no sane person would. FALSE: The trade deficit is consistently matched dollar for dollar by foreign investment into this country. It's pointless to talk ONLY about what is "flowing out" if you don't also examine what's flowing IN. We have had trade deficits pretty much every year for the past 30 years. Our economy has had its ups and minor downs during that time but nothing serious, and the trade deficit has had no significant effect one way or the other. If the trade deficit was such a scary thing, we would be in a second Great Depression by now. We're not. Germany has had a horrible economy for the past 30 years. They are running a trade surplus right now. Plus, poor developing countries usually run a trade surplus. Again, meaningless.
50
posted on
01/28/2005 11:54:46 AM PST
by
Zhangliqun
(What are intellectuals for but to complexify the obvious?)
To: Zhangliqun; Grampa Dave; Dog Gone; Southack
Buffett! The bone-headed billionaire buffoon that offered Schwarzenrenegger the advice that Cauleeforneeuns need to repeal Prop 13 because we don't pay enough property taxes!!!
Even the neophyte newbie celebrity Grabinnator had enough sense to see through the bizzarre billionaire buffoonery!!!
51
posted on
01/28/2005 12:01:37 PM PST
by
SierraWasp
(Moderates, are just too chicken to commit to any ideal!!! They prefer sophisticated sophistry...)
To: SierraWasp
Left wing billionaires are wise sages to be quoted in the media, while conservative billionaires are merely the source of evil funds for right wing wackos.
52
posted on
01/28/2005 12:14:46 PM PST
by
Dog Gone
To: Dog Gone; lewislynn
By George! I think you've swerved into the kernal of truth!!! Trouble is, they're not very altruistic and won't share funds with us other right wing wackos, or we could really swamp them left wing whackos! (they're worse than us, cause they gots an extra "h" in their descriptor)(plus they like Sweedish stuff to a fault)
53
posted on
01/28/2005 12:53:23 PM PST
by
SierraWasp
(Moderates, are just too chicken to commit to any ideal!!! They prefer sophisticated sophistry...)
To: SierraWasp
take a look at how much Buffett made on Gilette today before youcast him off as a buffoon.
To: oceanview
Well... Even a hog roots up a berry if they keep rootin long enuf!!!
55
posted on
01/28/2005 12:59:56 PM PST
by
SierraWasp
(Moderates, are just too chicken to commit to any ideal!!! They prefer sophisticated sophistry...)
To: SierraWasp
plus they like Sweedish stuff to a faultWhat's with you and Swedes? Do you have a blonde phobia
56
posted on
01/28/2005 1:11:34 PM PST
by
lewislynn
(The meaning of life can be described in one word...Grandchildren)
To: lewislynn
No! I'm blond, myself! It's that they're Liberal, Leftist Socialists, barely one step away from Communists, or as I prefer to dub them... Commonists!!!
57
posted on
01/28/2005 2:44:04 PM PST
by
SierraWasp
(Moderates, are just too chicken to commit to any ideal!!! They prefer sophisticated sophistry...)
To: SierraWasp
BuffetBrain was also against GW and Congress lowering the taxes on dividends, which encourage smart companies to go back to declaring dividends. Which has been great for those of who invested in companies/funds were dividends are important again.
58
posted on
01/28/2005 4:25:55 PM PST
by
Grampa Dave
(The MSM has been a weapon of mass disinformation for the Rats for at least 4 decades.)
To: Grampa Dave
Yes, and dividends are probably better for everybody than leveraged buyouts, junk bonds, etc., that once got better tax treatment than dividends used to, due to double taxation inspired by Liberal Dumbocrats in the past!!!
Dubya has been a breath of fresh air in many economic ways, no doubt about it!!! I'm havin a ball helpin employers set up those Health Savings Accounts!!! Talk about yer "win/win" situations for everyone involved!!!
59
posted on
01/29/2005 8:51:10 AM PST
by
SierraWasp
(Moderates, are just too chicken to commit to any ideal!!! They prefer sophisticated sophistry...)
To: ALPAPilot
So far it hasn't come back in, hence the deficit. When it finally does come back in all that inflation we've been exporting will to China will bite us bad.
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