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Buffett The Dollar Slayer

When E.F. Hutton, er, Warren Buffett speaks, people listen. The “Oracle of Omaha,” the legendary stock market investor now worth $52 billion according to Forbes magazine in March, told reporters during his first trip to South Korea that he expects the U.S. dollar to weaken further. Buffett said, “We are still negative on the dollar. We bought stocks in companies that are earning their money in other currencies,” while visiting a Berkshire Hathaway subsidiary in that country. “We are gaining foreign currency exposure that we like,” Buffett added. The dollar fell against its major counterparts earlier today, after a larger-than-expected decline in the durable-goods orders for September increased market expectations of an interest rate cut by the Fed.

The 77 year-old investor also weighed in on the subprime mortgage crisis in the United States. Buffett said that the subprime problem could last anywhere from another 6 months to 2 years.

Warren Buffett has been negative on the U.S. dollar for quite some time now. If you recall, back on June 14 I talked about his outlook for the greenback:

On October 26, 2003, Warren Buffet wrote a piece for Fortune entitled “Why I’m not buying the U.S. dollar.” Although a little dated, this article, and Buffett’s subsequent bet against the dollar, gives us insight as to where Mr. Buffett thinks the U.S. dollar and economy are going. Buffett said, “I started way back in 1987 to publicly worry about our mounting trade deficits — and, as you know, we’ve not only survived but also thrived. So on the trade front, score at least one ‘wolf’ for me. Nevertheless, I am crying wolf again and this time backing it with Berkshire Hathaway’s money.”

According to an October 18 Reuters article, Buffett bet more than $21 billion against the U.S. dollar amid concerns over mounting U.S. trade and current account deficits.