Buffet om credit crunch

Buffett Sees No Credit Crunch, Forecasts Lower Dollar (Update3)

By Sean Pasternak and Doug Alexander

Feb. 6 (Bloomberg) -- Billionaire Warren Buffett, chairman of Berkshire Hathaway Inc., said a credit crunch isn't under way and he forecast that the dollar's value is likely to decline.

Funds are available and can be borrowed inexpensively, Buffett said during an appearance in Toronto today as he took questions from the audience. The U.S. dollar is likely to fall during the next decade if policies don't change, he said.

Buffett ``wouldn't quite call it a credit crunch'' when asked to comment on global credit markets. ``Money is available and it's really quite cheap,'' he said.

The U.S. Federal Reserve said Feb. 4 that lenders made it tougher for companies and consumers to get loans in the past three months. About 80 percent of banks raised standards on commercial-property loans, a record, while a majority tightened terms on prime home mortgages, according to the Fed's survey of senior loan officers.

Fed Chairman Ben S. Bernanke warned Jan. 10 there was ``considerable evidence that banks have become more restrictive in their lending to firms and households.''

Buffett's company has the highest possible AAA credit rating and had more than $40 billion in cash available as of Sept. 30. He ranks among the world's richest people.

Berkshire isn't planning to invest in existing bond insurance companies, such as MBIA Inc. and Ambac Financial Group Inc., Buffett said in an interview. Instead, Berkshire will concentrate on its own new bond insurance company, he said.

Bond Insurers

``We've got an unlimited amount we can put in,'' Buffett said during an interview after his appearance.

New York Insurance Superintendent Eric Dinallo has been trying to organize a bank-led rescue of Ambac to prevent downgrades of the bond insurer that may roil credit markets, two people briefed on the plan said last week. MBIA, the largest bond insurer, said today it plans to raise $750 million by selling stock.

The only currency Berkshire directly owns now is the Brazilian real, Buffett said. He blamed the declining dollar on the current account deficit, with the U.S. trade imbalance playing the largest role.

``If something is unsustainable, it's going to have consequences; so far the consequences have been a general decline in the dollar against major currencies,'' Buffett said. ``If we continue the same policies, we're going to get the same results in the next five or 10 years.''

Inflation Outlook

Buffett has said he was looking for acquisitions outside the U.S., in part to hedge against long-term declines in the dollar. The company made its first non-U.S. acquisition in 2006, when it paid $4 billion for 80 percent of Israel-based Iscar Metalworking Cos., a family-owned maker of industrial tools.

Inflation has been in ``remission'' and is likely to be more prevalent in the next 10 years, Buffett said. The billionaire said he has ``no idea'' if the economy will go into a recession and that the U.S. will do well in the long run.

Buffett, 77, built Berkshire Hathaway over four decades, turning a failing textile maker into a $200 billion investment and holding company with businesses ranging from brick-making to corporate jet leasing. The Omaha, Nebraska-based company gets about half its profit from insurance units, which include Geico.

Buffett said he's likely to support either of the Democratic candidates, Barack Obama or Hillary Clinton, for the U.S. presidential election in November.

Buffett spoke to investor relations and corporate communications executives to promote Berkshire's Business Wire news distribution unit, which has expanded into Canada.

To contact the reporters on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net ; Doug Alexander in Toronto at dalexander3@bloomberg.net

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