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Warren Buffett Says The Dollar Will Continue To Lose Value

The trend will continue, while the dollar has regained some of it’s lost value, ~5% of the ~33% it has lost, Warren Buffet the internationally famous investor believes the dollar will continue to lose value.

In the future, I would predict that the US dollar will decline,” Buffett, the world’s second-richest man, said Wednesday at a Canadian business conference in comments transcribed in the National Post.

“I don’t know what it will look like in the short term, but force-feeding the rest of the world $2 billion a day is inconsistent with a stable dollar.”

It doesn’t take a financial genius to see the stiff head winds facing the currency. Like many experts, Buffett points to the US’ gargantuan trading deficit as the heart of the problem.

Other currencies are looking more attractive to the Oracle of Omaha. He told the Financial Post Wednesday he made several hundred million dollars betting on the Canadian dollar. Although he already exited the positions, he said he wished he had kept them.

The only current currency position for Berkshire Hathaway is the Brazilian real. It’s been another lucrative move for Buffett’s holding company. Since May 2004, the value of the Brazilian currency in dollars has increased by over two-thirds.

As I’ve posted earlier I have moved a sizable chunk of my money into off shore stocks. And it has been a hedge against the volatility in the American stock markets. However it’s main purpose is to protect my retirement against the insane monetary policies of the American government.

There are just too many dollars floating around the world, in part from the year after year trade deficits and the constant pumping of un-backed money by the Federal Reserve (budget deficits) in to our economy both the global and national.

Lowering the interest rates will only accelerate the process as international investors move money out of US Dollars, because they can get higher rate of returns elsewhere.

Coupled with Moodys warning that they will devalue the US’s bond rating from AAA downward, this is fair warning.

Portions from the Indian Stock Market Blog

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