Off-Topic: Buffet in NY Times

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	Name:	water_watcher -
	Subject:	Buffet in NY Times
	Date:	8/19/2009 7:43:57 PM

Looks like Warren does not agree that the Obama direction will lead to good things. Read the last sentence. Archie if you want to revise your projections you can.

In The Greenback Effect, Buffett details his ongoing warning that the "enormous dosages of monetary medicine" being used to rescue the U.S. economy will eventually produce a dangerous "side effect."

He worries there won't be enough borrowers ready and able to absorb the nation's growing debt relative to its economic output over the years, forcing Washington's "printing presses" to work overtime churning out paper money.

All those "greenback emissions" will, he fears, feed potentially "banana-republic" style rates of inflation.

"With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can't come close to bridging that sort of gap.

Buffett recognizes that's a very difficult position for politicians who depend on voters for their jobs.

Since they will "correctly perceive" that raising taxes or cutting spending will hurt their re-election chances, legislators may instead "opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes."

Buffett, however, believes the "invisible" and "latent" threat of inflation could be "as ominous as that posed by the financial crisis itself."