Buffet, Inflation and Deflation
Given the seemingly strong arguments for a coming deflation, I thought some of Warren's views on inflation, deflation and gold might be of interest.
I dug these out from my copy of "Buffettology," copyright 1997, Mary Buffett (purportedly based on conversations with Warren), which I recommend.
"Warren believes that there will always be inflation. The reason for this is that the alternative, deflation, is political suicide for our politicians." p.162.
"given a choice, politicians will always choose the feel-good illusion of wealth that inflation creates over the disastrous effects of deflation."
p. 163.
In the future, the "government may tell us to trade in our gold again in exchange for...paper dollars. Fool me once, shame on you. Fool me twice, shame on me." p.164.
P.S. May give some insight into Warren's recent silver and oil plays, though I suspect Berkshire's oil play must be getting creamed at the moment.
P.P.S. For me, a primary insight taken from the book is that today is unlike 1929 or any other depressionary era in that the gold standard no longer prevails. This provides politicians with an alternative to deflation, and alters the equation dramatically. |
