Everyone’s favorite billionaire Warren Buffett recently said that if he was helming the Federal Reserve he wouldn’t do much to raise interest rates. He purported that economic conditions are getting better right now, and implied that it’s due to these artificially low interest rates.
“I probably wouldn’t do much,” Buffett stated when asked what he would do if he was at the head of the century-old central bank. “Things are working pretty well, and I would be worried that if I raised rates significantly with negative interest rates in Europe, I would be very worried about what that would do to the flow of funds.”
Of course Buffett wouldn’t change a thing right now. He has benefited from the money pumping, credit expansion and low rates for years. Heck, during the economic stimulus established by President Obama at the height of the financial crisis, Buffett received billions for his own personal companies.
Remember, the well-connected elitists, like Buffett, enjoy the Fed’s current monetary policy because they consume this freshly created money at the source, much like a pig at the trough.
How could anyone expect anything different from a guy that has called for more deficit spending and greater tax rates but has conceded that he would never pay more than he has to?
“much like a pig at the trough” may be a bit graphic but it illustrates how the weight can be added just before slaughter. In 2010 the U.S. had about $56 trillion in individual wealth and today there is over $83 trillion. Mr. Buffett had economic income through increase in stock value of several billion each year but none of this capital gain will ever be taxed. He pays taxes on a paltry $30 or $40 million a year that he needs to live on. Buffett is still hungry.