Buffett essentially says equity investors can't beat high rates of inflation.
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Inflation is a dommestic economic artifact and deals with a rate of decline in the nominal purchasing power of the currency - in this case the US dollar.
There are two ways to look at the value of a greeenback. One is the domestic purchasing ability and the other is its value relative to other currencies.

1) A drop in the value of the US dollar will presumably increase the desirability of US-manufactured exports

2) A drop in the US dollar will increase the reported foreign profits of multinational companies based in the US when converted to USD

3) Adrop in the USD, all things remaining equal, will tend to increase the price of foreign stocks when converted into USD.

Those who follow the portfolio of stocks owned by Berkshire Hathaway will notice substantial investments in a bevey of Japanese companies (I picked up three of them a couple of months ago and they are up 12%, 16% and 22% respectivly. In fact, the substantial majority of my current equity portfolio currently consists of foreign companies (many held for years and a fair number held in shares of their native markets in terms of their currencies).

While Buffet is correct when he says equity investors can't beat high rates of inflation, he has placed bets to prove himself wrong (and I admit to have, long-term, taken a similar approach). While some of those bets have under achieved the performance of the US market a bit over the past few years, I suspect all good things come to those with patience.

Jeff