Buffett Predicts an “Onslaught of Inflation”
Saturday, February 28, 2009 9:43
In his long awaited annual letter to shareholders, Warren Buffet reflected on the economic crisis, the coming inflationary pressures, and his own personal mistakes. “During 2008 I did some dumb things in investments. I made at least one major mistake of commission and several lesser ones that also hurt,” he explains.
Speaking of the government response to the nations economic crisis, he writes:
“This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone ‘all in.’ Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel.”
He goes on to explain the foreseeable inflationary threat:
“These once-unthinkable dosages will almost certainly bring on unwelcome
aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation.”
On the issue of moral hazard, he says that “major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political
challenge. They won’t leave willingly.”
In 2008, Mr. Buffet’s Berkshire Hathaway suffered a decrease in book value per share of 9.6%, only the second such decline in Berkshire’s 44 year history. The price of his company’s stock has dropped over 50% since the 2007 peak of $151,600 per share.
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Jason Baker says:
March 1st, 2009 at 5:26 pm
It seems that you forgot the part where he says:
“Whatever the downsides may be, strong and immediate action by government was essential last year if
the financial system was to avoid a total breakdown. Had that occurred, the consequences for every area of our
economy would have been cataclysmic. Like it or not, the inhabitants of Wall Street, Main Street and the various
Side Streets of America were all in the same boat.”
chartingstocks1 says:
March 1st, 2009 at 9:13 pm
Yes I left it out purposely. It is complete nonsense. We don’t share the same interests as Warren Buffet. We don’t own controlling interests or major stakes in Wells Fargo, GE, Goldman Sachs, or American Express.
Our interests are NOT the same as much as he’d like for us to believe that.
awareone says:
March 1st, 2009 at 11:26 pm
This could have been predicted as soon as they starting overspending in the very beginning, not after it was realized they weren’t going to be taking control of the money in the Middle East like they deluded themselves that they would be able to do and now we as Americans are suffering for their delusions.
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How to Get Six Pack Fast says:
April 15th, 2009 at 8:51 am
This is very hot information. I’ll share it on Facebook.
Barack Geitner says:
May 27th, 2009 at 6:55 pm
When are people going to start boycotting…first those swollen, irresponsible banks…never put any money, directly or indirectly into any of them. Second, when companies get bailed out, bail out on them!
It is all about getting ahead of the curve (most people are in “willful blindness eright now…will be behind the curve when things hit, and changes are needed.
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