The ol’ dollar, it’s gonna go down

Bill Gates and Warren Buffett are short the dollar.

“I’m short the dollar,” Gates, chairman of Microsoft Corp., told
Charlie Rose in an interview late yesterday at the World Economic
Forum in Davos, Switzerland. “The ol’ dollar, it’s gonna go down.”

Gates’s concern that widening U.S. budget and trade deficits are
undermining the dollar was echoed in Davos by policymakers including
European Central Bank President Jean-Claude Trichet and German
Chancellor Gerhard Schroeder.

The dollar fell 21 percent against a basket of six major currencies
from the start of 2002 to the end of last year. The trade deficit
swelled to a record $609.3 billion last year and total U.S.
government debt rose 8.7 percent to $7.62 trillion in the past 12
months.

“It is a bit scary,” Gates said. “We’re in uncharted territory
when the world’s reserve currency has so much outstanding debt.’…

Gates reflected the views of his friend Warren Buffett, the
billionaire investor who has bet against the dollar since 2002.
Buffett said last week that the U.S. trade gap will probably further
weaken the currency.

“Unless we have a major change in trade policies, I don’t see how
the dollar avoids going down,” Buffett said in an interview with
CNBC Jan. 19.

Thanks to David Theroux for the pointer.