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The New Economy

Pessimistic about the US? Warren Buffett isn't.

Warren Buffett sees investment possibilities and untapped potential in US. But Buffett is concerned about Europe's debt crisis.

By Business Editor / May 2, 2011

Warren Buffett, chairman and CEO of Berkshire Hathaway, gestures during an interview on the Fox Business Network with Liz Claman in Omaha, Neb., May 2, 2011. Mr. Buffett said while the recovery was slow, it was steady and was unlikely to be shaken by events.

Nati Harnik/AP

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Warren Buffett, one of he world's most successful investors, is unabashedly upbeat about the prospects of the United States.

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Business Editor

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Never mind that the recovery is slow. Never mind that at his annual shareholders' meeting on Saturday he faced serious questioning over the resignation of his once heir-apparent.

The stock market? Mr. Buffett, CEO of Berkshire Hathaway, says he's still in the hunt to buy companies – perhaps two new ones that, combined, would equal roughly the size of the $9 billion deal he has to acquire chemicalmaker Lubrizol.

The battered housing market? It will come back, perhaps by the end of the year.

The shrinking US dollar? Yes, it will lose value, but not rapidly enough to bet a lot of money on it.

“Warren Buffett is just plain optimistic about the United States,” says Liz Claman, a FOX Business Network anchor who interviewed him twice in the past week. “Most of his acquisitions in the near future will be here in the United States…. He said [in an interview Monday]: ‘The luckiest person in the world is a healthy baby being born in the United States today. He or she will live so much better in so many ways 20, 30, 50 years from now than we live now.’ ”

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There are challenges, of course. Buffett himself points out that the housing market is still dragging down the economy, that inflation is worrisome, and that carrying out the threat to shut down the US government would be an extremely stupid move for Congress to take.

One of the biggest concerns of Buffett and Berkshire Vice Chairman Charles Munger is the sovereign debt crisis in Europe, says Ms. Claman of FOX. “They're on red alert…. It almost sounded as if they thought the weaker nations of the [European] union will be jettisoned.”

“I think the European Union is grossly underestimated the problem it has,” Mr. Munger said in a FOX interview Monday. “I suspect the euro will survive but there may be fewer members.”

Buffett himself is under more-tha-usual scrutiny after one of his high-level managers, David Sokol, resigned because of ethics concerns. Buffett said Mr. Sokol’s purchase of Lubrizol stock only weeks before suggesting that Berkshire Hathaway buy it violated the company's ethical standards.

But he faced hours of questioning from shareholders at the annual meeting on Saturday. He said he "obviously made a big mistake by not saying 'Well, when did you buy it?' " when Sokol first told him he owned the stock in January, according to CNBC. In an interview with CNBC afterward, he acknowledged he should have been more openly critical of the ethics lapse he perceived.

None of these challenges has blunted his positive outlook about the US, however.

"This recovery, although it's relatively slow, it came off an incredible shock,” he told FOX. “But it's been quite steady.... I don't think it'll get shaken.”

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