I received the 2008 Berkshire Hathaway annual report a few days ago in the mail. Yes, it has been available for some time, but only now have I had time to devote to reading it. During our plane flight and layover I spent some time reading it. Over the next week or so I’ll post some snippets I found interesting. For now, let me leave this comment Warren had on the prospects on future inflation.
Commenting on the financial crisis and the government reaction…
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 has previously meted out by the cupful has recently been dispensed by the barrel. 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. Moreover, 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 pubic teat will be a political challenge. They won’t leave willingly.
I suppose if you have faith in the government there won’t be any problem. Of course, we need the buyers of our debt to have faith in our government. I don’t believe there’s the necessary trillions of dollars worth of faith out there in today’s world, do you?
