Certainly the dollar has declined against the Euro, but most of America's foreign trade is with Latin America and the rest of Asia in which the foreign exchange picture is quite different. Euroland, as a whole, has a trade surplus with the rest of the world. This means that there is a shortage of euros relative to dollars in the hands of foreigners. By elementary supply and demand, the euro must appreciate relative to the dollar. But, so what? If the cost of European vacations and French wine increases for Americans, that hurts Europeans more than Americans. Americans can buy Chilean or Australian wine and vacation in Hong Kong or Singapore. The "fallacy" in Buffet's article is not that the dollar is not declining against the Euro, but his blaming this on America's "spendthrift" habits. The trade deficit, as the Capital Flow Watch article points out, is the result of foreigners willingness to accept dollars as payment for goods and services, not the result of American's savings habits. The criticism aimed at Mr. Buffet is not that he is not a smart investor, which he obviously is, but rather that he is using a phony argument to justify massive government intervention in commerce.
There is a fine rebuttal to Buffet's article appearing in the Capital Flow Watch web log, under the title "Warren Buffet Fears Foreign Ownership". This web log also has several other articles debunking panic attacks about the "trade deficit".