Current Account Deficit in Other countries?

[giml]

Is there any country that do not have current account deficit?

If $ breaks down, which country will benefit?


Thanks

giml

[EJ]

Is there any country that do not have current account deficit?

If $ breaks down, which country will benefit?


Thanks

giml

Most countries are running a current account surplus with the U.S. One strategy to hedge the risk of a collapse of the dollar due to a sudden drop in foreign investment in U.S. financial assets is to hold a basket of currencies and bonds issued by creditor countries, especially those that provide essential natural resource exports to the U.S. and otherwise have close political and economic ties with the U.S., such as Canada.

[lobodelmar]

...this is basically why Warren Buffet has been holding non-US dollar cash reserves for the past few years...last year this wasn't as lucrative because the dollar gained against the Euro...but overall he's made a bundle with this hedge against the dollar.

[jeffolie]

In 2005 Warren Buffett lost $1,000,000,000 in his currency positions against the dollar.

[JC Ernharth]

In 2005 Warren Buffett lost $1,000,000,000 in his currency positions against the dollar.

That's an unrealized loss for a mid term trend trade that remains correct... IMO

Stay Vigilant!

[blazespinnaker]

I suspect his bet against the USD is more of a hedging strategy than a profit making strategy like his purchases of US companies.

He does own an insurance company after all, and his credit rating is pretty critical, so he needs to show the rating agencies that a drop in the USD won't hurt him that much.

I can't imagine he is trying to market time the USD. It's not his circle of competence (buying well managed low tech companies is), and he should know by now not to stray outside his circle of competence.

[jeffolie]

The word on the street is the Warren Buffett is well past his investing prime because he lost .5 billion in derivatives and 1 billion on this dollar bet.