Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once unthinkable dosages will almost certainly bring on unwelcome after-effects. Their precise nature is anyone's guess, though one likely consequence is an onslaught of inflation.
Interpretation
Buffett warns that excessive economic interventions can lead to negative consequences like inflation.
Warren Buffett's quote highlights the dangerous trend of increasing economic interventions that were once made in smaller, more measured amounts, which are now being implemented on a larger scale. He suggests that such drastic measures can have unforeseen negative repercussions, including a potential rise in inflation that could affect the economy at large, underscoring the importance of moderation in economic policy.
In practice
In a discussion about economic policies, one might quote Buffett to illustrate the risks of large-scale interventions.
I have no views as to where it will be, but the one thing I can tell you is it won't do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money and there will be a lot - and it's a lot - it's a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.
If the world couldn't see your results, would you rather be thought of as the world's greatest investor but in reality have the world's worst record? Or be thought of as the world's worst investor when you were actually the best?
Cash never makes us happy, but it's better to have the money burning a hole in Berkshire's pocket than resting comfortably in someone else's.
I think you should read everything you can. In my case, by the age of 10, I'd read every book in the Omaha public library about investing, some twice. _x000D_ You need to fill your mind with various competing thoughts and decide which make sense.
The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.
One’s objective should be to get it right, get it quick, get it out and get it over. Your problem won’t improve with age.
The last thing you want to do is raise taxes in the middle of the recession because that would just suck up and take more demand out of the economy and put businesses in a further hole.
Unfair servicing practices can worsen a family's already difficult economic situation, and the injury echoes from the family to the community and ultimately throughout the economy.
I am in favor of high wages and agree that the higher the wages, the stronger the evidence of prosperity, provided (and that is the important point) they are so naturally, by the effectiveness of industry, and not in consequence of an inflated currency or any artificial regulation.
It is particularly odd that economists who profess to be champions of a free-market economy, should go to such twists and turns to avoid facing the plain fact: that gold, that scarce and valuable market-produced metal, has always been, and will continue to be, by far the best money for human society.
Income inequality is troubling because, among other things, it means that many people in our society don't have the opportunities to advance themselves.
If bankers become overly conservative in response to past lending mistakes - or if examiners force such behavior - it will hurt bankers' own long-term interests and the economy in general.
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