AMERICA has only itself to blame for the foreign spending spree buying US assets, Warren Buffett said this weekend.

In his annual letter to shareholders, the billionaire investment guru writes: “There’s been much talk recently of sovereign wealth funds and how they are buying large pieces of American businesses.

“This is our doing, not some nefarious plot by foreign governments. Our trade equation guarantees massive foreign investment in the US.

“When we force-feed $2 billion (£1 billion) daily to the rest of the world, they must invest in something here. Why should we complain when they choose stocks over bonds?”

American politicians have recently taken a tougher stance against foreign investment in the US. Buffett, chairman of Berkshire Hathaway, said they were wrong to do so.

“Our country’s weakening currency is not the fault of Opec, China, etc. Other developed countries rely on imported oil and compete against Chinese imports just as we do.

“In developing a sensible trade policy, the US should not single out countries to punish or industries to protect. Nor should we take actions likely to evoke retaliatory behaviour that will reduce America’s exports, true trade that benefits both our country and the rest of the world,” he writes.

But he warns that the trade imbalance is “unsustainable” and action should be taken “sooner rather than later”.

Berkshire invests in 76 businesses, and added $12.3 billion to its net worth in 2007, an increase of 11%.

But it posted an 18% drop in fourth-quarter net income, as investment gains fell and operating earnings declined at its core insurance business.

Buffett wrote: “We also were very lucky in 2007, the second year in a row free of major insured catastrophes.

“That party is over. It’s a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008.”

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