Warren Buffett warns America of ‘onslaught of inflation’
The multibillion-dollar bailouts handed out by the US Government will bring on an “onslaught of inflation”, Warren Buffett, the legendary investor, said in his keenly awaited annual letter to shareholders.
Mr Buffett, whose Berkshire Hathaway company last year reported only the second year of negative returns in its 44-year history, predicted that the economy would remain a shambles this year and “probably well beyond”.
President Obama signed off a $787 billion (£550 billion) stimulus package to revive America’s economy this month. The President has also said that he expects to spend more than the $700 billion allocated to bail out the ailing banking sector.
“Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel,” Mr Buffett said. “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.”