Reply #16: The principal wouldn't be affected. [View All]

[denverbill]

If you invest $1000 in a money market account, you'll get $1000 when you sell the shares. However, if the value of the dollar has decreased so that a dollar now only buys 90% of what it used to, you've effectively lost $100 in purchasing power.

Buffett sees the enormous trade deficit and budget deficit eroding the value of the dollar against foreign currencies. I can't say I disagree with him, although I have yet to put my money where my mouth is like he has.