Despite mainstream media’s attempt at downplaying the truth about inflation and the actual state of our economy, esteemed investors like Warren Buffett are speaking out.
Buffett, CEO of Berkshire Hathaway, is able to address his concerns from his first-hand experience.
The multinational holding company wholly owns companies like GEICO, Duracell, and Fruit of the Loom with significant holdings in public companies such as Kraft Heinz Company and American Express.
Could Buffett’s insight be the canary in the coal mine this time around?
At Berkshire Hathaway’s recent annual shareholder meeting over the weekend, Buffett had this to say, “We are seeing very substantial inflation. It’s very interesting. We are raising prices. People are raising prices to us, and it’s being accepted.”
“We’ve got nine homebuilders in addition to our manufacture housing and operation, which is the largest in the country. So we really do a lot of housing. The costs are just up, up, up. Steel costs, you know, just every day they’re going up.”
According to some, the dollar is “stronger than ever,” however, prices and the cost of goods are increasing everywhere.
It seems counterintuitive, doesn’t it?
Even Federal Reserve Chairman Jerome Powell recently commented how he expected inflation to “show a temporary move higher then settle back to around the central bank’s 2% target.”
The Federal Reserve has been calling inflation “transitory” as it keeps interest rates near zero. But Buffett believes it is not transitory, but substantial.
85% of the economy is in super high gear which means people have more money in their pockets, paying higher prices, and companies are raising prices.
Treasury Secretary Janet Yellen has her own take on inflation stating, “I don’t believe that inflation will be an issue. But if it becomes an issue, we have tools to address it.”
This was in response to the proposal of Joe Biden’s economic plan, which she also commented, “It’s spread out quite evenly over 8 to 10 years. So, the boost to demand is moderate.”
However, what some may not be considering is that many other costly bills have recently and are in the process of being passed by President Biden.
Combine these underlying factors with Buffett’s perception of the inflation his companies are seeing first-hand, one would be right to be skeptical of what the near future of our economy may hold in store for us.
The not-so-subtle discrepancies between the Fed and revered investors are raising eyebrows.
What’s more alarming is the rising national debt that isn’t slowing down anytime soon. How do you think that will affect our economy?