Warren Buffett on the Economy

"The government's budget deficit is a serious issue. A country that continuously owes ever larger sums to outsiders is not in an enviable position."

"We're not currency speculators. But the arithmetic of the US current account deficit worries me. A country that continuously sells pieces of itself must eventually offer ever-more-attractive terms."

"Globalisation has been enormously beneficial for the world. It has lifted billions out of poverty and created unprecedented prosperity."

"The babies being born in America today are the luckiest crop in history. American GDP per capita has grown from $2,500 in 1930 to vastly higher today."

"GDP growth is the ultimate measure of a nation's economic progress. American business in aggregate has delivered terrific results over time."

"Inflation is a far more devastating tax than anything enacted by our legislature. A thief who takes $100 is easier to identify than a government that quietly devalues the dollar."

"Interest rates are the most important factor in determining asset prices. They act as gravity on valuations."

"Our country's trade deficit is a warning sign. We are consuming more than we produce and selling assets to foreigners to make up the difference."

"We make no attempt to predict the course of general business or the stock market. Period. We try to price, rather than time, purchases."

"Bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price."

"The US trade imbalance is exporting assets to the rest of the world. A nation that is a net debtor cannot remain indifferent to the value of its currency indefinitely."

"American business has delivered terrific results over the 35 years. It should therefore have been a very easy period for investors. But it hasn't been. Why? Because of frictional costs."