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.
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If you're totally illiterate and living on one dollar a day, the benefits of globalization never come to you.
I'm just saying that if you understand how the economic machine works, it just works like a machine. There are cause-effect relationships.
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Long experience, in the United States and in other advanced economies, has demonstrated that monetary policy is most successful when decisions are rendered independent of influence by elected officials.
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