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Buffett: Not auctioning off America to the highest bidder

We're reading monthly about numerous U.S. financial institutions needing to turn to foreign governments for money to stave off financial disaster. While some investors cry foul, alluding to nefarious plots to take over America, Bloomberg examines uber-investor Warren Buffett's take on what's occurring in the economic world today.

Instead of some global plot against the U.S., Buffett says that investments by foreign government-controlled firms are fueled by U.S. spending overseas, not political motives. These so-called sovereign wealth funds are merely responding to some to our own activities.

"This is our doing, not some nefarious plot by foreign governments,'' said Buffett, chairman of Berkshire Hathaway Inc. (NYSE: BRK.A), in his annual letter to shareholders. "Our trade equation guarantees massive foreign investment in the U.S. When we force-feed $2 billion daily to the rest of the world, they must invest in something here.''

Bloomberg reports that countries like China, Russia, and Dubai have deployed record central bank reserves to set up funds to invest as much as $2.9 trillion. We've already seen a flurry of activity. Investment funds from Singapore, Korea, Kuwait, and Abu Dhabi bought stakes during the past four months in the largest U.S. bank in terms of assets, Citigroup (NYSE: C), and Merrill Lynch (NYSE: MER), the world's biggest brokerage.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

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Last updated: November 27, 2009: 08:14 AM

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