Will You Bet Against Warren Buffet?

Warren Buffet says his $26 billion purchase of the Burlington Northern Santa Fe railroad is an "all-in wager on the economic future of the United States." Buffet, who famously did not buy into the Internet Bubble, has a pretty impressive track record when it comes to predicting the economic future.

So what does that economic future look like according to Buffet?

Strong rail, cheap coal, expensive oil, according to some analysts.

You can easily follow the logic concerning oil and railways. In an age of peak oil production, as oil prices rise, trucking goods around the country becomes less and less competitive with rail transport. But how does cheap coal fit in?

There is admittedly a very plentiful supply of coal still in the ground in the US, Canada, UK and other areas of the World. However, regulations on CO2 emissions would seem to diminish the prospects for coal.

So what is Buffet's Bet? Is he betting that:

• There will be some miraculous development in clean coal technology?
• The exorbitant cost of oil will make coal the only viable option for the US economy?
• Regardless of domestic use, coal will be exported to China where economic growth will continue to outstrip that of Western nations?

The last option kind of misses the boat on CO2 emissions. It doesn't matter where in the World the coal is burned -- it will still have the same effect on climate change.

And whose economy is he really betting on?