Posted on 09/19/2013 3:39:19 PM PDT by posterchild
The billionaire investor spoke one day after the central bank surprised investors by postponing its expected wind-down of monetary stimulus, which has in five years more than tripled the Fed's balance sheet to above $3.6 trillion.
"Since the panic of five years ago, he's done a terrific job," Buffett said on CNBC television in a joint interview with Brian Moynihan, chief executive of Bank of America Corp.
Asked if he would reappoint Bernanke when his term expires, Buffett said: "That's what I would do."
Nevertheless, at an event later Thursday afternoon at Georgetown University, Buffett said that the Fed's eventual exit from its monthly bond-buying program will carry unforeseen risks.
"We are in an experiment which hasn't really been tried before," he said, adding that "buying securities is usually easier than selling securities."
Berkshire owns more than 80 businesses in such areas as insurance, chemicals, railroads and clothing, and has more than $130 billion of equity and fixed income investments.
[...] Stocks "were very cheap five years ago, ridiculously cheap, and that has been corrected," Buffett said. "They're probably more or less fairly priced now... We're having a hard time finding things to buy."
(Excerpt) Read more at reuters.com ...
The fed stimulus will end the second Republican wins the presidency.
All of today’s billionaires are LIBERALS...of course, Liberal Free Trader Communist Globalists.
Of course, Buffett is going to like Bernanke...both love Phoney Money
This is just about the most stupid thing in the world. The federal government propping up the markets via “printing” money is going to make the inevitable crash harder than ever. The market crashes, the economy crashes, the government crashes and we all lose.
"This is the biggest redistribution of wealth from the middle class to the poor to the rich ever. Who owns assets? The rich. The billionaires. You think warren buffett hates this stuff? You think I hate this stuff? I had a very good day yesterday."
h/t Freeper "RckyRaCoCo"
The old POS is only in this for himself and his buddies. He knows that printing vapor dollars does nothing for the average citizen and allows him to pump up his holdings and then sell when things are about to collapse.
At what point in time will people realize that the Fed has no intention of selling the securities purchased unless they can do so at a profit? They DON’T HAVE TO SELL! They can just hold the bonds or mortgage securities until MATURITY. You all are missing the point; the markets won’t get disrupted if they continue a buy and hold approach!
They pocket the interest and eventually it nets out against the treasury. As long as the lenders are willing to finance the US debt (and no other central banker around the world that matters is going to upset this game because so many of their country’s largest companies export to us) this game will go on until the economic grownups are back in power in the U.S.
This is what happened during the Reagan deficits and the world’s central bankers went along with it then too.
This can go on until the normal economic growth kicks in and capacity in both the labor markets and physical plants approach the normal levels, like say 85% plant utilization and say 5% unemployment. That is when the inflation risk finally kicks in. Sure, some things have inflated, like the price of gas at the pump and a number of food items. But housing costs deflated from their peak and other items have cheapened because of lower wage globalization so that for many people the cost of living has somewhat netted out to a normal inflation rate. You can now buy a car like a Toyota Corolla that will last 150,000 miles if taken care of for about $15,000. That brings the cost of driving down substantially from when I was a kid and you were lucky to get 70,000 miles out of a car.
So many of the ‘experts’ here have bemoaned the potential for hyperinflation but that has NOT HAPPENED and likely will not.
And the national debt grows and grows. What can possibly go wrong.
It’s not solely about the amount of debt but of the ratio to GDP. The key is when we get back in power to lower that ratio back to manageable levels. Reagan knew he could raise the debt because our ratios were so low. Debt isn’t always bad; if it is used productively. In the 80’s it was used to win the Cold War. Today, Obama just wastes it on so much unproductive crap.
And if the Treasury ends up netting out the debt against the Federal Reserve’s balance sheet the ratios return to lower levels.
I’m not saying this is a good thing; just that the Fed buying this paper is a hell of a lot better than selling it to China - at least we aren’t going to use leverage against ourselves.
Until normal economic growth sets in? A more and more remote prospect as the government further destroys the fundamental economic system of USA. And we are losing even more jobs now that obamacare is approaching. Absent some very special situations, no business person is going to hire now. And absent special situations no real investments can be made At least not in America where the political risk is so extremely high these days. Could the e oniony recover someday? I firmly would like to think so. But for the next three years well hang on as best u can ( and pray).
We did eventually get out of the last time a liberal moron ran things for two terms (and then some!), FDR. If we could recover from that we certainly can recover from this.
And we then need to take over the education establishment and purge the books of ANY LIBERAL ECONOMIC THEORY!
Any course in political economy needs to explain how destroying work incentives and business opportunities can lead to a sustainable productive economy. Right now that chapter is missing from the textbooks.
Well, Obama is not increasing productivity or the GDP. He’s destroying it. He also has no interest in lowering taxes or government spending. Just the opposite. He’s driving up debt both on and off the books, spending (wasting) taxpayer money like there’s no tomorrow, and he’s expecting the tax payers to pony up more. The man and his Marxist policies are total losers. And when the fed finally tapers off or bails out, the last “investors” holding the worthless paper are the losers (along with the rest of us).
Jim, the Fed will NEVER bail out and will likely NEVER SELL, they will hold to maturity. That paper is buried in the US government’s balance sheet for the next thirty years, or until the mortgage-backed securities they purchased are paid off. This is one of the ways the banking system gets fresh liquidity. We did this ourselves with the Japanese banks in the 90’s when they blew up. The Japanese banks needed to raise liquidity to write off their bad real estate loans and one way they did it was to accept private placement US Treasury bond debt and then turn around and pay their depositors low rates on their savings accounts (sound familiar?). If you lend at 4% to the U.S. and pay the depositors 0.5% that profitability allows the banks to raise excess capital over a period of years.
We did it to help them out AND help us out. We got a source of cheaper financing debt than the market rates were at the time and their banks got a positive cost of carry to help write off bad debts quicker.
Same thing with us in the last five years. TARP was only the first step of repairing the banking system. Even with lending at low levels our banks are making enormous profits right now, which they needed to write off all the bad debt from the awful real estate lending encouraged by the U.S., particularly the Community Reinvestment Act.
I’m not making a judgment call on the morality of this. I would have preferred to take this a step further and broken up the northeast stranglehold on lending and transferred ownership to the regional, smaller banks that didn’t get into so much trouble but the timing of the need didn’t allow that. Even some of the smarter Democrats in D.C. (yeah, there are a couple but don’t ask me to name them!) knew that the banks weren’t the biggest villains here and that’s why TARP was passed without too much fuss.
I know a lot of us would have liked to see the free market handle it but the numbers were just too large and the lack of hard information on what truly was the money at risk led us down the path we ended up taking.
It’s government fraud. A Ponzi scheme. And the bill will come due long before thirty years.
Jim, the bill can only come due if the Fed tries to sell the paper they hold, otherwise it’s just like you or I buying a 30-year bond and HOLDING IT. Same thing. It’s just a paper transaction right now.
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