Monday, March 07, 2005

Buffett's Annual Report.

Here is a link to Buffett's annual report. It is an important read so check it out. He seems to be selling US$. I'd love to look at the structure of his currency trades.


At 12:07 AM, Anonymous Phelps said...

Buffet has certainly made some $$$ on the dollar drop, but his arguments for dealing with the trade deficit seem to ring hollow to me. Why is he so concerned with foreign ownership of US assets? Nobody is moving Coke's or Ford's HQ's to a foreign country and it will be hard for the Chinese and the Russians to move their Manhatten and Laguna Beach real-estate to their homeland.

Growing up in LA in the '80's I witnessed the real-estate market boom as Japanese investors bought up the southland while the locals forecast doom. The locals were right, doom came, but not in the form of a Japanese onslaught, but rather a real estate bust fueld by the '91 recession and the Japanese need to liquidate US real estate holdings as the Japanese economy took a nosedive.

The last time we ran consecutive trade surpluses was in the '70's - a period of great stagnation and, ultimately, inflation. Since that time the US economy has grown tremendously but we have run deficits in trade.

Recessions are great cures for trade deficits, but I'm not certain that we should wish for that currently - I know I don't.

A link that may prove insightful to those that want to dig into this further.


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