Stocktwits - At Berkshire Hathaway (NYSE:BRKa)’s (BRK-A) (BRK-B) annual general meeting held on Saturday, billionaire investor Warren Buffett offered his take on the dollar’s recent weakness.
Following President Donald Trump’s retaliatory tariffs, the greenback has weakened significantly this year. The dollar index, which tracks the greenback’s value over a basket of major currencies, has lost about 7.9% year-to-date.
The "Oracle (NYSE:ORCL) of Omaha" said Berkshire does nothing based on the dollar’s impact on annual and quarterly earnings. Yet, he said that the yen’s behavior in the last quarter resulted in certain GAAP charges, although it didn’t make any difference. "It will change next month or next year," he added.
Berkshire has invested in five of Japan’s biggest trading firms: Mitsubishi, Mitsui, Sumitomo, Itochu, and Marubeni. Buffett reaffirmed his commitment to the investment at the AGM, saying he would keep it for "50 years or more."
Buffett also expressed his fears concerning the U.S. dollar. "Obviously, we wouldn’t want to be owning anything that we thought was in a currency that was really going to hell," he said. "That’s the big thing we worry about with the United States currency."
"The tendency of a government is to want to debase its currency...there’s no system that beats that."
The nonagenarian, who plans to step down as Berkshire CEO at the end of the year, said the U.S. fiscal policy scares him because it’s made the way it is, and all the motivations are to do a lot of things that can cause trouble with money.
Buffett also warned against devaluing currencies. He said the natural course of a government to make currency worth less over time has significant consequences.
But Buffett believed that it’s very hard to build checks and balances into the system to prevent that. He also took potshots at Trump’s tariff policy. "We’ve had a lot of fun here in either the first 100 days or the last 100 days, whatever you want to call it," he said.
The Invesco DB U.S. Dollar Index Bullish Fund (UUP) ended Friday’s session down 0.15% at $27.53, taking its year-to-date losses to 6.4%.
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