Warren Buffett generated some headlines during his visit to Toronto yesterday.  But one in particular generated some extra attention.

Dow Jones Newswires transmitted this flash yesterday afternoon:

Buffett has been negative on the U.S. dollar for some time now, so the "worthless" comment may have sounded a bit extreme, although in keeping with his general bearishness on the greenback.

Extreme ... and inaccurate.  He really said the dollar would be "worth less" if the nation's current account deficit isn't brought under control.

After the Squawk Box team chatted about the initial "worthless" quote this morning, Buffett took matters into his own hands and called Becky Quick on set to personally set the story straight.    

A video clip appears to the left.  Unfortunately, viewers weren't able to hear Buffett's side of the conversation.

We went back and found the audio of his dollar comments from yesterday's Toronto appearance.  While it does sound like "worthless" as one word, that doesn't fit with the phrase that followed: "... compared to other major currencies." 

Here's the audio and text of what he said about the U.S. dollar:

"Insanity consists of doing the same thing over and over again and expecting a different result.  In the United States, the cause of, in my view, of the declining dollar in very major part, is the current account deficit, the trade deficit being the biggest factor in that. 

Our trade deficit has decreased a little bit in terms of GDP in the last year, not so much by the trade deficit going down, but GDP going up.  But we still are sending about, the United States, about two billion dollars a day to the rest of the world.  And if you keep force-feeding two billion a day to the rest of the world, even as big as the U.S. is, with all the assets we have, people become a little reluctant, more reluctant over time, to hold those dollars, or dollar-denominated assets. 

And if we keep doing that over time in the future, and it looks like we will, I would predict that the U.S. dollar will decline.   Not next month, not next year, I don't know what it will look like in the short term.  But I would say that force-feeding a couple of billion a day to the rest of the world is inconsistent with a stable dollar.

Interestingly enough, (former Federal Reserve Chairman) Alan Greenspan in 2003, and you can look it up on the internet on a search engine, said that such a course of action was unsustainable.  And (current Federal Reserve Chairman) Ben Bernankeabout four or five months ago made a speech where he said it was unsustainable.

But that was sort of it.  After they say it is unsustainable, everybody goes to lunch.

If something is unsustainable, you know, it's going to have consequences.  So far, the consequences have been a general decline in the dollar against major currencies.  And I would expect that ... If we continue the same policies, we're going to get the same result in the next five or ten years.   That's not a short term forecast on currencies, because a lot of things govern whether the Canadian dollar goes up or down against the U.S. dollar tomorrow.

But, if we keep, if our current account deficit keeps running at present levels, the dollar, I think, is almost certain to be worth less five or ten years from now compared to other major currencies."

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