Warren Buffett attacks American ‘spending junkies’

Warren Buffett, one of the world’s most successful investors, has launched his most withering attack to date on the US trade deficit, describing Americans as “rich spending junkies” who could turn into a nation of “sharecroppers”.

“Without policy changes, currency markets could even become disorderly and generate spillover effects, both political and financial,” Mr Buffett warned. “Such a scenario is a far from remote possibility that policymakers should be considering now.”

Just wait, bloggers from the loony right will no doubt attack Buffet for being “unpatriotic.” Of course, given that Buffet is a billionaire many times over, it must severely addle them for such an epitomie of capitalism to slam the US so hard. They can always assuage their pain by buying another SUV. Or by cheerleading for a new war. As if more huge war-driven deficits are what the economy needs.

Berkshire Hathaway, the main investment arm for Buffet, made 1.84 billion last year being short the dollar. 

Buffet said: “I would be still happy even if I was wrong”. Foreign investors had begun to withdraw their investments believing the Bush Administration’s policy would increase the budget and foreign trade deficit, stated Buffet and added that this incident placed pressure on the dollar, which was already heading towards an historical low. Buffet indicated that US foreign trade policy is increasing and continually hampering rallying of the Dollar. The US economy has “deeply rooted fundamental contractual problems” and the moderate transition policy of the administration will not help the trade deficit, claims Buffet.

Bill Gates is also betting against the dollar

Bill Gates, whose net worth of $46.6 billion makes him the world’s richest person, is betting against the U.S. dollar.

“I’m short the dollar,” Gates, chairman of Microsoft Corp., told Charlie Rose in an interview late yesterday at the World Economic Forum in Davos, Switzerland. “The ol’ dollar, it’s gonna go down.”

“A capitalist is someone who will sell you rope on Monday for a revolution on Tuesday in which he gets hung on Wednesday” would seem to apply here. What’s needed is a new and better economic system, one not based on short-term short-sighted speculation caused by boom-then-bust cycles, where a tiny few get richer and everyone else gets screwed.