Thursday, October 25, 2007

Buffet Comments on Housing and the Value of the Dollar

The excerpts below from are some general comments about the US economy from Warren Buffet. People are always looking for stock tips from Warren Buffet. His comments about the economy are very useful because they give an over view of the economy than can then be used to find stocks (if you like stocks). Personally, his comments are better at steering people into mutual funds. For example, he expects the US economy to remain weak and the dollar to continue to weaken. The investment strategy could be mutual funds that invest outside the US and any mutual fund that is a play against the dollar (energy and gold).

American billionaire investor Warren Buffett said Thursday that problems in the U.S. subprime mortgage market will likely weigh on consumers for up to two years, but that the U.S. economy will weather the storm.

Rising default rates among U.S. mortgage holders with poor credit histories have rattled global credit, stock and currency markets since August and raised concerns about a possible recession in the U.S. economy, a major export market for Asian companies.

"In the next 6 months, one year, two years the problems in the mortgage market can cause a lot of problems with consumers and hurt buying power in the United States," he said at a press conference after arriving earlier in the day from China on his private jet.

However, the U.S. economy has often had to face various difficulties and the present was no exception, Buffett said.

"Overall the economy will make progress," he said.

Buffett also expressed pessimism on the U.S. dollar.

"We still are negative on the dollar relative to most major currencies," he said.

The dollar has fallen against the euro, British pound, Japanese yen, Indian rupee and many other Asian and European currencies this year. The euro, for example, has gained 8 percent against the dollar this year.

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