Buffett Warns: U.S. Dollar's Stability at Risk

Billionaire Warren Buffett has issued a stark warning about the state of the U.S. economy, cautioning that the stability and purchasing power of the U.S. dollar can be easily eroded. In Berkshire Hathaway's annual letter to shareholders, Buffett warns that "paper money can see its value evaporate if fiscal folly prevails." He notes that this reckless practice has become habitual in some countries and that the U.S. has come close to the edge in its short history.

Buffett also expresses concern about the historic levels of abuse within the capitalist system, despite its power to promote prosperity. He acknowledges that the American process has not always been pretty, with scoundrels and promoters seeking to take advantage of those who mistakenly trust them with their savings. However, he remains optimistic about the potential of capitalism to deliver a quantity and quality of output beyond expectations.

The 94-year-old Berkshire Hathaway CEO hints at his eventual retirement, stating that it won't be long before Greg Abel replaces him as CEO and will be writing the annual letters. Buffett emphasizes that Berkshire Hathaway is impartial in its choice of equity vehicles, investing in either variety based upon where it can best deploy savings. He praises Abel's ability to act at such times, comparing him to Charlie Munger.