The U.S. dollar, the Swiss franc, the future of China, Acme Brick, and why Buffett always starts from a "position of fear."

This is part seven of the transcript and video of Warren Buffett's 'Ask Warren' appearance on CNBC's Squawk Box on Monday, March 1, 2010.

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QUICK: And we've got just a few minutes left before we have some data that comes out. Warren, I thought we could do some rapid fire questions that have come in from shareholders, too.

BUFFETT: OK. Yeah.

QUICK: All right. Here's the first one. This comes from Bojan in Phoenix, Arizona. "If you had to change all cash from the US dollar, which currency would you buy?"

BUFFETT: That's a tough question. It might be the Swiss franc.

QUICK: It might be the Swiss franc?

BUFFETT: Well, if you're--if you're saying I have to do it.

QUICK: Yeah, you have to.

BUFFETT: We have our money in dollars, overwhelmingly, but if I had to pick one, I might pick that.

QUICK: All right. I'm going to break from rapid fire. Why?

BUFFETT: Well, I just--I worry--I worry about all currencies. So I mean, currencies are the prospect--the future of a currency is a product of governmental action and I--the real question is, how disciplined governments will be over a long period of time. Our government has been pretty darn good.  On the other hand, you know, I was born in 1930 and the price level is probably 15 times what it was then, so currencies depreciate over time. And the real question is where are they likely to depreciate the least. And I--but I'm--I'm not making that bet. I'm just--you asked me a question, and I gave you a fast answer.

QUICK: We forced it on you.

KERNEN: If we...

QUICK: Go ahead. Go ahead, Joe.

KERNEN: Becky, if Warren--have you covered any of your dollars short, Warren?  Because I don't know if you saw this--what happened with the euro recently, but you've been short the dollar for years, right? Did you cover any? Or have you lost some money in the last three months?

BUFFETT: No, we have no real foreign currency.  We haven't had any foreign currency transactions as foreign currency transactions themselves for some years. Now, we own a lot of things in dollars, we own--we own a utility business in England, which makes us money in pounds. We own Cologne Re in Germany, and so we have earnings in different currencies around the world.  Well, we've had no explicit currency transactions...

KERNEN: Oh, you used--because there was a couple of years ago, then. Because you used to, right?

BUFFETT: It was a couple of years ago, yeah, right.

KERNEN: You were short--you were short the dollar. OK. So you got--you don't have that position anymore.

BUFFETT: No. We were long about 10 different currencies against the dollar, maybe, I don't know, three or four years ago...

KERNEN: OK.

BUFFETT: ...and we closed all those positions up. But the best thing to own, you know, the best thing to have is your own talent. They can't take that away from you. But the best thing to own is a good business. A good business, you know, you know, whether it's Frito-Lay or whether it's Coca-Cola or whatever it may be, they will retain their value in real terms in my judgment over time no matter what governments do to currency.

QUICK: You said, though, that a bet either for or against a currency is a bet for or against that government. If you were worried, and let's say you're worry level and let's just measure a couple of things against each other, euro vs. the dollar, which worries you more?

BUFFETT: That's a tough--that's a tough call. I mean, both the euro, European Union countries and the United States are running very large deficits. I mean, they--both of those currencies in terms of purchasing power will decline in value over time in my judgment.

QUICK: British pound vs. the dollar. Is that the same story?

BUFFETT: Same way. I--there are all--they are all following policies that will cause their currencies to lose value. Which one will lose more value than the other, it's so hard to tell.

QUICK: Yen vs. the dollar? Same story?

BUFFETT: The yen is--Japan is the great mystery of all time. I mean, in terms of the policies they follow, what happens, you know, low interest rates, huge deficits and all of that sort of thing. That one is a mystery I don't even try to think about solving.

QUICK: OK. Let's get back to rapid fire, some of these questions from our viewers. Peter in New York writes in, "How many annual reports do you read a year?"

BUFFETT: Oh, I read hundreds. I just over--you mentioned AIG. I read a 550-page 10K. That's 550 pages printed out. I don't know how many go in, but I read that on Friday night, for example. And I read--I read a lot of reports. I keep looking for a centerfold or something in these reports, I never find one.

QUICK: All right. Here's a question from Bulgaria. "Have you ever thought about buying a country?"

BUFFETT: I don't think I want to own a country. That is not financially very good, although the power to tax would be kind of interesting.

QUICK: All right. And this is a real--this is a really mean one from Eric in Chicago.

BUFFETT: Ah.

QUICK: He says, "On air live, in front of the camera, what's a 173 times 192?"

BUFFETT: I don't know the answer to that. I could square numbers up to 100 very easily in my head, but above 100 it gets hard.

QUICK: So what's 200--or 2,350,000 worth in 15 years if it compounds at 13 percent?

BUFFETT: Well, it would--it would--it's--in 13 years?

QUICK: Yeah.

BUFFETT: It would be--it would be something...

KERNEN: I'll get that one.

BUFFETT: ...is two million--about 10...

QUICK: Two million, three-hundred and fifty-thousand.

BUFFETT: It would be around 10 million, yeah.

QUICK: All right. Well done. OK. Carl, we'll send it back to you.

QUINTANILLA: That was...

QUICK: I know we have some data coming up very quickly.

QUINTANILLA: There's a new reality show, "Are You Smarter Than Warren Buffett?"

KERNEN: Yeah.

QUINTANILLA: Don't you think?

KERNEN: Hey, Warren, Warren, were you using the rule of 72 there? You were, weren't you?

BUFFETT: No, actually, I was calculating the distance of the moon and dividing by the speed of sound.

QUINTANILLA: That was the best part of TV so far this morning. A lot more, in fact, and Warren in Omaha in a little bit.

QUICK: You know, Carl, we were just talking while that information was coming out, and Warren said there is a currency that maybe he would look at a little more strongly. We were trying to weigh all those currencies against each other.  What--Warren, what currency is it?