Monday, November 16, 2009

Buffett predicts economic comeback in 2012

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In a rare media interview, Berkshire Hathaway, Inc. chief Warren Buffett told television's Charlie Rose that while Berkshire's own businesses (including BNSF Railway) have seen the bottom of the recession, the national economy isn't likely to register a comeback for two more years.

warren_buffet_3.jpgAs Reuters noted in reporting the interview, the world's second-richest investor “made a big bet on the U.S. economy” when Berkshire agreed to pay about $26.4 billion for the shares of BNSF (about 77%) not already in its portfolio.

Buffett expressed concern about the rising national deficit.

“In the end, Congress is the one that determines the value of the dollar over time. If they follow policies that require us printing too much of it, monetizing debt and all that sort of thing, dollars will become worth a lot less,” he cautioned. “They've got to raise taxes now that income will go up as the recession ends anyway, but they're going to have to close the gap between expenditures,” he also said. “We cannot keep running fiscal deficits like we are currently without having a lot of consequences over time.”