Market Finance Time

Warren Buffett CNBC Interview

March 9, 2009

Billionaire investor Warren Buffett told CNBC televisionsays on Monday the US economy has “fallen off a cliff fallen off a cliff,” Buffett said Monday during a live appearance on cable network CNBC. “Not only has the economy slowed down a lot, but people have really changed their habits like I haven’t seen.”" and warns that inflation may accompany a rebound, US economic developments were close to the worst case he had imagined and recovery would not happen fast. “People are confused and scared,” he said. During his interview Buffet said that the current economic climate is at the worse end of the scale he expected.

“What is required is a commander in chief that’s looked at like a commander in chief in a time of war,” Buffett said.

Whatever the government does to help the economy will likely benefit some people who made poor financial decisions, but Buffett said Americans should realize that everyone is in the same boat.

“The people that behaved well are no doubt going to find themselves taking care of the people who didn’t behave well,” Buffett said.

The current efforts to help revive the economy are likely to produce inflation that could be worse than what the country suffered in the late 1970s, Buffett said.

But even though the nation will have to pay for current policies with future inflation, Buffett said, the U.S. government still needs to act.

“We’re in a big war, and we’re going to use money to fight it,” he said.

Maintaining faith in the nation’s banking system will be important to restoring the economy’s health, Buffett added. He said President Barack Obama needs to make it very clear that consumers won’t lose money in banks even if more fail.

“If you don’t trust where you have your money, the world stops,” Buffett said.

Most banks are in good shape, Buffett said, and even some of the troubled banks will be able to remedy their problems over time by reducing dividends and collecting the difference between interest payments they receive on loans and the interest they pay on deposits.

“The banking system largely will cure itself,” Buffett said.

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