[Mb-civic] CBC News - BUFFETT WARNS OF TURMOIL WITH U.S. TRADE DEFICIT

Wed Jan 18 18:27:56 PST 2006

This email has been sent to you by harry.sifton at sympatico.ca
The following is a news item posted on CBC NEWS ONLINE
at http://www.cbc.ca/news
____________________________________________________
BUFFETT WARNS OF TURMOIL WITH U.S. TRADE DEFICIT
WebPosted Wed Jan 18 16:37:24 2006

---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 has warned.

"Right now, the rest of the world owns $3 trillion US more of us than we
own of them," Buffett told business students and faculty at the
University of Nevada in 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.

Buffett, head of Omaha, Neb.-based Berkshire Hathaway Inc., also
disclosed his purchase of Business Wire, a privately held distributor of
press releases, for an undisclosed amount.

San Francisco-based Business Wire will operate as a wholly-owned
subsidiary of Berkshire Hathaway, whose other holdings include the
insurer Geico Corp. as well as stakes in American Express, Anheuser-Busch
and Coca-Cola.

Business Wire competes with PR Newswire to distribute company regulatory
filings and press releases to investors and the news media.

The U.S. trade deficit for the first 11 months of 2005 totalled $661.8
billion US, surpassing the previous annual record of $617.6 billion US
set in 2004. Economists say when December figures are included, the final
deficit for 2005 will top $710 billion US. Buffett said he expects it to
top $700 billion US this year.

"That's $2 billion US a day. 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," he said.

FROM DEC. 16, 2005: U.S. deficit falls slightly in third quarter

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," 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.