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Buffett's inflation prediction could boost Gold Investment

The man widely regarded as the world's most successful long-term investor has suggested that the US government's response to the financial crisis will lead to dollar devaluation and a period of inflation.

Warren Buffett, who is ranked as the second-richest man in the world by Forbes with a fortune of $37 billion, recently saw the book value of his Berkshire Hathaway investment vehicle fall by 9.6 percent.

However, his comments at its annual shareholders' meeting in Nebraska provided a boost for anyone with a Gold Investment, as the yellow metal tends to move in the opposite direction to the greenback and is viewed as a hedge against inflation.

Mr. Buffett said: "What we are doing is borrowing from the rest of the world and building up government debt.

"The classic way of reducing the impact and cost of foreign debt is by reducing the value of the dollars you're going to repay them with."

His observations come after Jamie Sokalsky, chief financial officer at Barrick Gold, the world's largest gold producer, claimed last week that Gold Prices look set to rise further as global supplies are declining.

Mining Weekly quoted him as saying: "The fact that it is getting harder to finance gold mines, it is clearly more difficult to find, permit and build the mines - they are more expensive and it takes longer - means that supply is likely to decline more than people think."

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