The unfortunate thing Warren forgets to mention is that the government of Squanderville have been promoting these trade deficits and the sell off of assets at the behest of a particular group of people who stand to benefit from the end result of this activity. It's amazing that Warren Buffett is promoting the economic ideals of Thomas Jefferson. He has put the blame on the Lazy people of Squanderville instead of the group that should rightfully get the credit.

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

Thomas Jefferson

True hytek, I think he was being gentlemanly in not really blaming anybody, but making a super simple illustration of the risk of having a trade deficit while selling off your debt instruments backed by your own government.

Gary,

Sorry to be so long in responding, I just got back home.

Money is power. Control all money at the source and you have limitless power. How many times have we heard that power corrupts and absolute power corrupts absolutely? Our government was supposed to have checks and balances. Congress was to have control of the government purse but finally conferred it upon a private banking cartel in 1913. Below is a quote from a former president who signed the Federal Reserve Banking act. His quote tells precisely why Warren Buffett is careful not to mention the root of the problem concerning why this is happening.

Hytek

"Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it." President Woodrow Wilson

Gary,

Didn't mean to say that Buffetts analogy wasn't good, just that it didn't go far enough. Anyway see my New Logo for the Federal Reserve System.


Fed logo

A little off topic but the following article supports Gary's belief in buying gold: http://articles.moneycentral.msn.com/Investing/CompanyFocus/WhyGoldsGoingStraightTo1000Dollars.aspx

GQ