April 28, 2008
The Facts
On CNBC today Warren Buffett said “Overtime, if we follow these trade policies, the dollar will be worthless”. He also said that what the Fed did with Bear Stearns was a line in the sand. Just exactly what he meant by the latter is not clear. In addition, he declares that we are in a recession regardless of what the so-called experts say.
My View
The trade policy that Buffett was referring to was obviously our trade deficients. Although he has indicated in the past that he has no problem with free trade in its basic definition, he is painfully aware that the one-way trade policy that our government seems to be applauding is certain death for our currency. Unlike so many of the people who have made billions in the stock market just by swapping money around, Warren Buffett has made his billions mostly through businesses. That is not to say a good portion of his money has not been made on Wall Street, but he has engineered most earnings through businesses. Therefore, I tend to think his vision of where we are going carries much more weight than those of the first kind.
Buffett has also recognized that those who are earning billions on Wall Street are not interested in what happens to the average stockholder. The following is an exert from Wiki on Buffet: “He has repeatedly criticized the financial industry for what he considers to be a proliferation of advisors who add no value but are compensated based on the volume of business transactions which they facilitate. He has pointed to the growing volume of stock trades as evidence that an ever-greater proportion of investors’ gains are going to brokers and other middlemen.” I’m not sure when he made that statement, but he has certainly been proven right.
The term “free market” is often quoted in defense of those who abuse our market & trade policies to the point of destroying millions of other peoples’ lives; all in the name of greed. As I mentioned in a past post, there was a survey once that asked if someone should be allowed to earn millions of dollars while providing no value. Naturally, most who participated in the survey thought they should be allowed. It would be interesting to see what those same people think today, now that they are paying over $1 more for a gallon of gasoline and what is estimated to be 20% more for all goods & services than they would if people were not allowed to make money when adding no value.
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