Stock Market Crash! Blog

Warren Buffet Warns of Financial "Chaos"

Here's an article about Warren Buffet warning of Financial "Chaos".

Since 2002, billionaire investor Warren Buffet has been bearish on the dollar. "In 2002, we entered the foreign currency market for the first time in my life, and in 2003 we enlarged our position as I became increasingly bearish on the dollar," Buffett told investors in a letter in last year's annual report.

Now, at 2004's end, Buffet remains short a staggering $20 billion. According to Forbes, Buffet is full of “doom and gloom” for the dollar. The root of Buffet's fears is the $10 trillion of the US economy owned by foreigners. As huge deficits increase, foreign investors are pulling out of the dollar. “If lots of people try to leave the market, we’ll have chaos because they won’t get through the door,” Buffett told Forbes.

Warren Buffet is one opinion that I have the utmost respect for. After all, he is the world's second richest person and he made his fortune through investing. And if you take a look at the dollars chart, you will see Warren Buffet has been one very profitable bear.

Here is a link detailing the Mississippi Scheme of the early 1720's. The Mississippi Scheme was a business calamity that occurred in France when the Mississippi Company was given full trading rights with French Colonies.

John Law, the head of the Mississippi Company, promised investors 120% profit due to the expected riches to be found in the Louisiana Territory. Investors were told tales of large quantities of gold to be found in these areas. There were over 300,000 applicants competing for just 50,000 shares. Shares quickly rose to newfound heights.

Needless to say, no gold was found east of the Mississippi River and the Mississippi Company became bankrupt. Shares quickly plummetted when investors realized that they had been hoodwinked. John Law was exiled from france following his business debacle.

This was just a quick summary of a more in depth article that I will be posting later this week. I eventually plan to write about 20 other historic business calamities. My hopes are to create the most comprehensive collection of information concerning business disasters.