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Buffett, Gates Losses May Put Davos Focus on Dollar

January 23, 2006
``The ol' dollar, it's gonna go down,'' Bill Gates said at last year's World Economic Forum in Davos, Switzerland. He, George Soros and Warren Buffett each bet against the U.S. currency in 2005.

They lost.

Economists at Deutsche Bank AG say that's because forecasts for a lower dollar ignore China's emergence as an economic powerhouse. They and Harvard University economist Richard Cooper say the dollar's 2005 gain -- 15 percent against the yen and 14 percent against the euro -- vindicates their argument that a record U.S. current account deficit won't necessarily push the currency down. The theory suggests those predicting a dollar drop this year, including Merrill Lynch & Co. and UBS AG, may be at risk for further losses.

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