Dan Sweet

Warren Buffett’s thoughts on the Fed in October 2007 (9 of 12)

This is the ninth in a series of twelve posts. The introduction to the series is here. By way of review, these are my notes of Warren Buffett’s responses to questions from Notre Dame and Stanford MBAs on October 9. 2007.

Is the Fed doing a good job?

They can’t solve everything.

Dropping the rates a lot is less of an option with the dollar situation—$2B/day flowing out.  Bernanke’s hands are somewhat tied.  Brazilians have been supporting the dollar recently as their currency has become worthless.

Perceptions lag reality.

Gold and oil are up a lot but much of that is just our perspective and the result of the weak dollar.

Current account deficit is unsustainable.  Bernanke just said it. Greenspan said it in 2003.

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