Buffett "rarely" questions the US dollar
Warren Buffett rarely questioned the dollar at the Berkshire Hathaway shareholder meeting, stating that he does not want to hold a currency that may depreciate significantly and mentioned the possibility of financing in other currencies. He had purchased euro and yen hedging positions in 2002/2003. Although concerns about the dollar did not materialize, this trade performed well in the short term
Buffett said at the Berkshire shareholder meeting:
"Clearly, we wouldn't want to hold any currency that we think will significantly depreciate."
"There may be some things happening in the U.S.… that would make us want to hold a lot of other currencies. For example, if we invest in a certain European country… we might finance a lot in their currency."
For Buffett, who has always supported U.S. assets, questioning the dollar is quite rare.
In 2002/2003, Berkshire purchased billions of dollars in euro and yen hedging positions. Although Buffett's concerns about long-term current account deficits did not materialize in the short term (the dollar soared in the following 20 years), this trade ultimately became quite a good short-term trade as the dollar index fell by 30% from 2002 to 2007.
He elaborated on some of this in his 2003 letter.
