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Microsoft's Bill Gates Says U.S. Economy Is `Very Strong'

Microsoft's Bill Gates Says U.S. Economy Is `Very Strong'

March 9 (Bloomberg) -- Microsoft Corp. Chairman Bill Gates, the world's richest man, said the U.S. economy is ``very strong'' and customers are increasingly willing to spend money on new technology projects and investments.

``I see a very positive attitude towards the economy and investment'' in information technology, Gates said yesterday in an interview. ``The willingness to invest in new projects is quite high -- not what it was in the late '90s, but we may never see that again in our lifetime.''

Gates, who said in January that he's betting against the U.S. dollar, said the decline of the currency has benefited software companies such as Redmond, Washington-based Microsoft, which generates half its sales overseas. His comments on the economy echo statements by Federal Reserve Governor Ben Bernanke, who said two weeks ago the U.S. economy ``is in a pretty good growth phase.''

The U.S. economy is growing faster than Europe and Japan even as the dollar has declined against the euro and the yen.

U.S. gross domestic product rose 3.9 percent in 2004 from the previous year. GDP for the Euro zone, the 12 European nations participating in the Economic and Monetary Union, rose 1.6 percent. Japan's GDP rose 0.6 percent.

Gates said in January at the World Economic Forum in Davos, Switzerland, that he's selling the dollar short because it is likely to fall further. He said he was concerned that U.S. budget and trade deficits are undermining the country's currency.

R&D Boost

Gates wouldn't comment on his currency position yesterday. The added boost from overseas revenue gives companies the chance to increase research and development or offer discounts to customers, Gates said.

``It gives us a chance to take some of that, put more in R&D, take some of that, reduce the prices,'' Gates said.

The U.S. will continue to lead the world in research and development for the software industry and other businesses, Gates said.

``No matter what happens with the dollar, the U.S.'s position as the lead economy, the center of R&D for our industry and many others as well -- there's no doubt that will continue in a strong way,'' he said.

The dollar fell 21 percent against a group of six major currencies from the start of 2002 to the end of last year. The trade deficit swelled to a record $609.3 billion last year and total U.S. government debt rose 8.7 percent to $7.62 trillion in the past 12 months.

``It is a bit scary,'' Gates said in January in an interview with Charlie Rose. ``We're in uncharted territory when the world's reserve currency has so much outstanding debt.''

Warren Buffett

Gates bet on the dollar followed that of friend and bridge partner Warren Buffett, the second-richest man, who has been buying foreign currencies since 2002, citing the impact of the U.S. deficits.

Buffett, the chairman of the Omaha, Nebraska-based investment company Berkshire Hathaway Inc., bought $1 billion in foreign-currency contracts in the third quarter, bringing his total to $20 billion of forward contracts in eight currencies on Sept. 30, according to Berkshire. The currency position gave Berkshire a $412 million pretax gain in the quarter as the value of the dollar fell.

Gates yesterday said the U.S. will innovate to keep pace with emerging economies such as China. He compared the situation to the ``crisis of confidence'' in the 1980s about whether the U.S was becoming less competitive with Japan. During that same decade innovations like the personal computer and the Internet were developed, leading to the economic surge of the 1990s.

``Even as the mix of work is more international and you have partners all over the world, a lot of the leading companies and the profit generation, job creation -- a lot of that can be in this country,'' Gates said.

``It is a challenge,'' he said. ``We have to step back and say, `Are we renewing our leadership'?''


LINK: http://www.bloomberg.com/apps/news?pid=10000087&sid=a.3oJPLRSY4E&refer=top_world_news