Buffett warns of trouble
The U.S. trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to “political turmoil,”-billionaire investor Warren Buffett warned.
“Right now, the rest of the world owns $3-trillion more of us than we own of them,” Mr. Buffett told business students and faculty Tuesday at the University of Nevada, Reno. “In my view, it will create political turmoil at some point .... Pretty soon, I think there will be a big adjustment,” he said without elaborating.
The U.S. trade deficit for the first 11 months of 2005 totaled $661.8-billion (U.S.), surpassing the previous annual record of $617.6-billion set in 2004. Economists say when December figures are included, the final deficit for 2005 will top $710-billion. Mr. Buffett said he expects it to top $700-billion this year.
“That's $2-billion a day,” he said. “We are like a super rich family that owns a farm the size of Texas. You sell off a little bit of the farm and you don't see it.”
Fifteen years ago, the U.S. had no trade deficit with China, he said.
“Now it's $200-billion. If we don't change the course, the rest of the world could own $15-trillion of us. That's pretty substantial. That's equal to the value of all American stock,” Mr. Buffett said.
“That's the big danger. Our national debt does not bother me. Our public debt is not at a crazy level,” he said.
Meanwhile, Mr. Buffett said U.S. companies generally are enjoying some of their best times ever.
“Profits are at close to record levels. So business in America is doing very well — better than its lower-paid workers, by some margin,” he said.
“This is a pro-business United States,” he said. “If you get a group of businessmen together, they'll complain about regulation and liability suits, all kinds of things. Some of those things they are right about and some of it they are just complaining to complain.”
Tags
economics
USA
Warren Buffett
1 comment:
..
absurd thought -
God of the Universe thinks
communism is SUPER
even though it never works
because we are not robots
absurd thought -
God of the Universe feels
communism is fair
fools can't or won't think it through
idiots just keep scheming...
..
Post a Comment