The real reason why Warren Buffett is shopping in Europe

Some say this is to acquire revenue streams in hard currency. All right but surely a far more obvious reason for Buffett to be buying companies in Europe is that he wants to move away from the devaluing US dollar. For if the dollar continues downwards for the next couple of years that will deliver Berkshire Hathaway a devaluation bonus on its European assets.

You have to admire this master tactician as he covers his tracks. He tells people not to time markets while doing it himself to consummate effect: you do not enter the silver or bond markets without a very keen sense of timing.

Perhaps then it is not unreasonable for Buffett to be talking the dollar up while placing his money into companies using other currencies because he really thinks the greenback is heading down.

In life, politics and investing what is the simplest explanation is usually true. But what should the Saga of Omaha be shopping for in Europe?

I would never dare to advise my wife on what shoes to buy so why try to second guess an expert? He’s going to doubtless spot value where nobody else does! Swiss watches perhaps because they never go out of fashion and have fat profit margins.

But then he bought US railroads as a spin on the oil price so expect some surprises. However, this will be a distraction from the true objective which is to place a buffer under Berkshire’s profits as the US dollar falls.

Expect a rough couple of years for the greenback with even lower interest rates to offset a Wall Street crash to greet President Obama and the economic mess the current administration leaves behind. Dollar devaluation will eventually bottom out but Buffett wants some insurance, and that is what he will buy in Europe.