Warren Buffett Warns of US Dollar Devaluation

The US dollar index hit a 2-month low, prompting renewed attention to Warren Buffett's warning about a potential currency devaluation in the US economy. The billionaire investor and CEO of Berkshire Hathaway expressed his concerns during the company's shareholder meeting in May 2025.

Buffett's Warning

Buffett stated that the US government tends to devalue its currency over time, and there is no system that can prevent this. He also highlighted that the US fiscal policy is a major concern, as it has the potential to disrupt the flow of money into the economy.

"The tendency of our government is to want to debase its currency over time, there is no system which beats that,” said Buffett. "The (US) fiscal policy is what scares me because it's made the way it is. All the motivation is towards doing a lot of things which can cause trouble with money.”

Implications for Investors

Buffett's warning has significant implications for investors. He emphasized that Berkshire Hathaway will not own anything that is likely to lose value due to currency devaluation. Instead, the company may consider owning other major currencies, such as the Japanese yen.

"Obviously, we wouldn't want to be owning anything that we thought was in a currency that was really going to hell,” said Buffett. "There could be... things happen in the United States that... make us want to own a lot of other currencies.”

US Dollar Index

The US Dollar Index dropped to a two-month low level on December 16, 2025, before recovering some of its losses. The index's fall was compared to its levels on October 16, 2025, denoting a two-month low.

The US dollar rose against the Japanese yen after the Bank of Japan raised its key interest rate by 25 basis points to 0.75%, marking its highest level since September 1995.

Conclusion

Warren Buffett's warning about a potential US dollar devaluation serves as a reminder for investors to be cautious and diversify their portfolios. As the US dollar index continues to fluctuate, investors must stay informed and adapt to changing market conditions.