Revealing exchange from Warren Buffett

Revealing exchange from Warren Buffett

The main equity news on the weekend came from Warren Buffett and it wasn't good at all.

  • He sold all his airlines stocks
  • He didn't buy anything and now has $137B in cash on hand

One headline that didn't get much attention was about US default. He dismissed the worry but he also touched on debt monetization.

If you print bonds in your own currency, what happens to the currency is it can be a question because you don't default. And the United States has been smart enough and people have trusted us enough to issue, which is that in its own currency and Argentina is now having a problem because the debt isn't in their own currency and lots of countries have had that problem. And lots of competent countries will have that problem in the future. It is very painful to owe money in somebody else's currency, but listen, if I could issue a currency Buffet bucks and I had a printing press and I could borrow money, I would never default. So what you end up getting in terms of purchasing power can be in doubt.

Those were his only comments on the dollar. The full transcript is here.