This is what worried investors such as Warren Buffett: “For a time, foreign appetite [for U.S. debt] readily absorbed the supply,” Buffett noted in his March 2004 letter to Berkshire Hathaway investors. “Late in 2002, however, the world started choking on this diet, and the dollar’s value began to slide….” Yet, Buffett observed that an ongoing trade deficit meant “whether foreign investors like it or not, they will continue to be flooded with dollars. The consequences of this are anybody’s guess. They could, however, be troublesome—and reach far beyond currency markets.”
