From 2009-12 Buffett warned that emergency monetary and fiscal action would stoke inflation, that the dollar was in the hands of a profligate Congress and that Treasuries would lose real value. He was wrong. Now he's back.
"Number one rule of Wall Street: nobody - I don't care if you're Warren Buffett or Jimmy Buffett - nobody knows if the stock's going to go up, down, sideways, or in [#]ucking circles; least of all stockbrokers. It's all a Fugazzi. You know what a Fugazzi is?"
- Matthew McConaughey as Mark Hanna in "The Wolf of Wall Street"
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Emil YouTube: https://bit.ly/310yisL
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----EPISODE #72 TOPICS----
01:16 Howard Buffett, Warren's father, was an outspoken opponent of the New Deal fiscal deficits
03:04 Prior to 1933 the gold standard was an opportunity for people to act as 'bond vigilantes'
05:14 In 2009 Buffett warned of fiscal irresponsibility; the dollar's value in danger (nope).
09:21 In 2011 Buffett warned that the US dollar purchasing power would suffer losses (nope).
12:13 In 2011 Buffett warned that the potential for inflation was significant (nope).
12:26 In 2012 Buffett warned that the value of US Treasuries would suffer real losses (nope).
14:29 Are stocks a discounting mechanism that accurately reflect economic fundamentals? (nope).
17:14 Have US stocks, since 2008, performed better during non-QE periods than QE periods?
20:06 Academic studies explain that the three ways QE may affect the economy don't affect it.
24:25 In 2021 Buffett warns that inflation is happening and that the US economy is red hot.
26:03 Is inflation a K-shaped phenomenon where the less-well off are bearing the brunt of it?
--------REFERENCES--------
Is Warren Buffett Beautiful?: https://bit.ly/2Q13nuJ
Buffet's "The Greenback Effect": https://nyti.ms/3f2mey3
Crypto & Coffee with @NicholasBlack60: https://youtu.be/oaz-n6ayL1w
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7
---------WHO-----------
Jeff Snider, Head of Global Investment Research for Alhambra Investments, and Emil Kalinowski short stocks since March 6, 2009. Art by David Parkins. Podcast intro/outro is "The Bayou" by Tigerblood Jewel at Epidemic Sound.
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