May 17, 2011, 12:01 a.m. EDT
Buffett’s silly talk about the U.S. debt
Commentary: U.S. isn’t special and can’t avoid default forever
By Barry Wood
WASHINGTON (MarketWatch) — At Berkshire Hathaway’s annual meeting in Omaha, Chairman Warren Buffett raised more than a few eyebrows when he said that, “The United States is not going to have a debt crisis as long as we keep issuing our debts in our own currency. The only thing we have to worry about is the printing press and inflation.”
Was the oracle really suggesting that there is no chance that the U.S. will ever experience a Greek-style debt meltdown where it couldn’t get financed and would have to turn to outsiders like the International Monetary Fund for help? Apparently, he was.
Harvard University historian Niall Ferguson, who has written extensively on debt, is aghast at what he calls Buffett’s highly simplistic view. “Buffett,” he says, “must know this is nonsense.” Ferguson continues, “Britain had complete monetary sovereignty in the mid-1970s and yet the IMF had to be called in. I could give numerous other examples. And then there is the inflation risk, which is implicit in his statement. We won’t have a debt crisis because we can print unlimited quantities of paper dollars. If that’s the good news, I don’t want to hear the bad.”
Full article: http://www.marketwatch.com/story/buffetts-silly-talk-about-the-us-debt-2011-05-17?link=MW_story_populara
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