Sunday, March 2, 2008

Warren Buffett is doing what????

There was a recent bit on late night TV that went like this; "You know the world is upside down when 1) the best golfer in the world is black, 2) the tallest player in the NBA is Chinese and 3) the German's finally found a war they don't like". Well, perhaps we can add another line, "when Warren Buffett shuns the US dollar and invests in (gasp) the Brazilian real. But, according to his letter to shareholders issued last Friday that is exactly what he is doing. In fact, the real was his only currency position last year. In fairness, this does speak well for the economic progress made in Brazil. Progress, by the way that was made by going against the very vocal advice coming from both Wall Street and Washington, D.C. In recent years Buffett has made money betting against the dollar by investing in other currencies including the Canadian dollar. That is the real story here, the world's strongest economy in terms of output, at least, can't manage its own finances. Click here for a link to his letter.
I avoid making political comments here but the fact is our fiscal / monetary policies have us requiring upwards of a trillion dollars from overseas each year. Given that, the dollar can do nothing but decline. While a cheap dollar helps exports, it adds to the cost of just about everything we consume.

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