- 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.
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- 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.
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- 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.
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- "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."
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- "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."
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- 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".
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- He adds: "This annual royalty paid the world...
would undoubtedly produce significant political unrest in the US.
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- "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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- © Copyright of Telegraph Group Limited 2005.
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- http://www.telegraph.co.uk/money/l.html
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