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Strategies & Market Trends : The Residential Real Estate Crash Index

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From: bentway	3/6/2005 10:34:09 AM
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Buffet warns of a future American "sharecropper society" to foreigners.. telegraph.co.uk Buffett condemns 'force-feeding' of US wealth to the rest of the world By Robert Peston (Filed: 06/03/2005) Warren Buffett, the world's greatest investor, yesterday launched a vitriolic attack on the US government for failing to take effective action to reduce the country's trade deficit. The chairman of Berkshire Hathaway, which owned $21.4bn (£11bn) of foreign exchange contracts at the end of 2004, also warned that the dollar would continue to fall, even after its recent declines. In his latest annual letter to shareholders of Berkshire Hathaway, the extraordinary successful conglomerate he founded more than 30 years ago, Buffett complains that the trade deficit is leading to an alarming transfer of US assets into foreign ownership. "Americans end up owning a reduced portion of our country while non-Americans own a greater part," he writes. "This force-feeding of American wealth to the rest of the world is now proceeding at the rate of $1.8bn daily." "Consequently, other countries and their citizens now own a net of about $3 trillion of the US. A decade ago their net ownership was negligible." He warns of dangerous consequences if these trends continue. He says that within a decade, the US would be compelled to deliver "3 per cent of its annual output to the rest of the world simply as tribute for the overindulgences of the past". He adds: "This annual royalty paid the world... would undoubtedly produce significant political unrest in the US. "A country that is now aspiring to an 'ownership society will not find happiness... in a 'sharecropper's society' " But he says that just such a demeaning outcome is "where our trade policies, supported by Republicans and Democrats alike, are taking us."

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