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He suggested doing so would bolster a dollar whose weakness has sparked cries of foul from Bogota to Beijing.

The Fed's decision to buy $600 billion of government debt has drawn scathing comments from nations which contend it is generating global instability by strengthen their currencies against the dollar, inflating asset bubbles and fueling inflation in their economies.

From Berlin German Finance Minister Wolfgang Schaeuble pronounced, "With all due respect, U.S. policy is clueless."

Bernanke, answering questions from college students in Florida, stressed that Fed policies aimed at giving a boost to the weak U.S. recovery would pay dividends around the world.

"I think it's important to emphasize ... that a strong U.S. economy, a recovering economy, is critical, not just for Americans, but it's also critical for the global recovery," Bernanke said.

G20 TENSIONS

The Fed's easy monetary policy, made even looser on Wednesday with the new bond-buying plan, has rankled emerging market economies and others, and it looks set to be a bone of contention at a Group of 20 nations summit in Seoul next week.

South African Finance Minister Pravin Gordhan said Fed policy "undermines the spirit of multilateral cooperation" that the G20 had sought to achieve. The money will find its way into financial markets of emerging nations with potentially devastating impact on their exports, he charged.

Bernanke said U.S. policymakers were fully aware of the dollar's importance in the global economy as a reserve currency. The dollar has weakened sharply and did so again after this week's decision on a new round of so-called quantitative easing.

"The best fundamentals for the dollar will come when the economy is growing strongly," Bernanke said. "That's where the fundamentals come from."

He told the students that while commodity prices have risen sharply, they were the exception amid generally muted prices for other products and should not cause a serious problem.

Bernanke said there was ample slack in the U.S. economy that will prevent producers from being able to fully price costlier commodities into finished products that consumers buy.

"Globally traded commodities like energy, food ... have been going up pretty sharply," he said. "Where there's a lot of slack in the economy ... it's very, very difficult ... for producers to push through those costs to the final consumer."

SLACK TO SPARE

The billionaire investor's Burlington Northern Santa Fe railroad had heavy demand in the quarter to transport a range of commercial and agricultural products, reflecting the growing strength in the manufacturing sector.

Buffett called his purchase of the railroad "an all-in wager on the economic future of the United States," and its contribution to results lent credence to his strategy.

But the sore spot in the quarter was a loss on a portfolio of options tied to a basket of major stock indexes. Despite his distaste for derivative instruments, Buffett has insisted these bets would pay off, given their long time-frame and high upfront fees.

But they generated a loss of $700 million in the quarter, compared to a profit of $220 million a year ago.

Long-time Berkshire investors said the results were "reasonable" but they still took pause from the fall in profits in the quarter.

"I think (a) concern obviously is some of the derivative adjustments that are happening, and it's hard to say why that's the case," said Michael Yoshikami, president of YCMNET Advisors in Walnut Creek, California, which invests $1 billion and owns Berkshire stock.

INVESTMENT PORTFOLIO

Berkshire is better known for its stock portfolio than its derivatives, with Buffett's imprint on some of America's top companies in a range of industries.

He was a net seller of shares in the quarter to the tune of about $1.2 billion. Berkshire's quarterly report Friday showed it trimmed holdings in Procter & Gamble Co but added nearly $500 million to its position in Wells Fargo, among other moves.

At the same time, cash and equivalents rose 23 percent in the quarter to $34.46 billion.

"I don't think it means he's gearing up (for a deal), I think it's more reflective of the investment strategy. This is really just a cash cow," YCMNET's Yoshikami said. He said Berkshire is, for him, two companies -- one to generate cash flow and one to make venture investments.

Those kinds of investment decisions have largely been driven by Buffett, who turned 80 in August.

Frequently called the "Oracle of Omaha," he has run Nebraska-based Berkshire since 1965. The conglomerate owns about 80 businesses and a huge portfolio of stocks valued in the tens of billions of dollars.

As he ages, Buffett's succession has been a concern for Berkshire investors. He eased their fears somewhat by naming hedge fund manager Todd Combs as one of his firm's asset managers on October 25. The little known Combs will oversee a significant portion of Berkshire's holdings.

Nonfarm payrolls rose a solid 151,000 in October, the first gain since May, a government report showed on Friday. Private hiring rose by 159,000, while the government cut 8,000 jobs.

Data for August and September also was revised to show 110,000 fewer jobs were lost than previously thought.

Economists had expected payrolls to increase a tepid 60,000 last month, with private employment rising 75,000.

"This was hugely surprising. It's strong across the board," said Fabian Eliasson, vice president of currency sales at Mizuho Corporate Bank in New York.

The dollar rose on the data, while bond prices retreated. However, stocks slipped as investors pocketed profits after markets hit a two-year high on Thursday.

The solid jobs growth failed to make a dent in the lofty unemployment rate, which remained at 9.6 percent for a third straight month, in line with market expectations.

Concern over the anemic job market was a factor behind the Federal Reserve's decision this week to pump an additional $600 billion into the economy through government bond purchases to push interest rates down further and stimulate demand.

The U.S. central bank, which cut overnight interest rates to near zero in December 2008, had already bought about $1.7 trillion in government debt and mortgage-linked bonds.

Analysts said the data was not strong enough to knock the Fed off its new policy course, but it tempered speculation the central bank might have to step up its bond buying.

"It's still probably not enough to get the Fed convinced the unemployment rate is going to go down or inflation is going to go up," said John Canally, an economist at LPL Financial in Boston. "But this is certainly a good kick-start."

The economy would need to create at least 125,000 jobs a month on a sustained basis to make a noticeable dent in unemployment. Still, private hiring has come in above 100,000 in each of the past four months -- an encouraging sign.

"That's not good enough, the unemployment rate is still unacceptably high and we've got a lot of work to do," President Barack Obama said at the White House.

Anger over joblessness helped the Republican Party wrest control of the House of Representatives from Democrats in elections on Tuesday, which were viewed as a referendum on Obama's economic policies.

In his remarks, Obama renewed a call for small business tax breaks, new infrastructure spending, aid for the jobless and an extension of soon-to-expire tax cuts for the middle class.

The keenly awaited non-farm payroll report for October will be released at 8:30 a.m. EDT (1230 GMT). Employment is seen rising for the first time since May with 60,000 non-farm payrolls added in the month, while the unemployment rate is expected to remain elevated at 9.6 percent.

The employment report follows a sharp rally in stocks and commodities worldwide on Thursday that was spurred by the Fed's decision to buy $600 billion in government bonds.

The dollar was mired near 11-month lows against a basket of currencies while oil eased from a two-year high, but losses were limited by the new round of U.S. economic stimulus, which has boosted the appeal of commodities as an asset class in an environment of a weak dollar.

Data on September pending-home sales will be released at 10:00 a.m. (1400 GMT).

S&P 500 futures fell 5.2 points were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 38 points, and Nasdaq 100 futures lost 4 points.

The S&P 500 index is up about 16 percent since the start of September as investors bet that action by the Fed and Republican gains in the U.S. midterm election would create a better environment for corporate profits. The Dow index closed at its highest since the collapse of Lehman Brothers bank in September 2008.

Europe's biggest bank HSBC (HSBA.L) said profits so far this year were "well ahead" of 2009 levels with losses on bad loans hurting less than at any point since the onset of the credit crisis in 2007. U.S. traded shares of HSBC (HBC.N) fell 2.3 percent to $55.61 in premarket trade.

Japan's Toyota Motor Corp (7203.T) (TM.N) cautiously nudged up its profit forecast, underscoring how vulnerable Japan's biggest company is to the firm yen and a tepid sales recovery that are weighing on its shares.

The premium investors demand to hold 10-year Irish government bonds rather than German benchmarks rose to a euro lifetime high on Friday after a budget some traders said was "unrealistic", keeping pressure on other peripheral sovereign issuers.

Starbucks Corp (SBUX.O) raised its full-year profit forecast, boosting confidence it has entered a new phase of growth.

CBS Corp (CBS.N) reported a 42 percent rise in third-quarter profit on Thursday and authorized a $1.5 billion share repurchase program.

Wal-Mart Stores (WMT.N), the world's biggest retailer, said it was cooperating with an investigation into possible insider trading related to its takeover of Japanese retail chain Seiyu Ltd.

Eli Lilly (LLY.N) said on Thursday U.S. regulators approved the use of Cymbalta, its blockbuster anti-depressant drug, for chronic musculoskeletal pain, including lower back pain and osteoarthritis.

S&P 500 companies scheduled to report earnings throughout the day include American International Group (AIG.N), Coventry Health Care Inc (CVH.N), Ventas Inc (VTR.N) and Washington Post Co (WPO.N).

(Reporting by Angela Moon, Editing by Chizu Nomiyama)