Tags: buffett | bernanke

Buffett: Bernanke Saved Us From Depression

Friday, 26 Jun 2009 10:02 AM

By Dan Weil

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Some critics are screaming that Ben Bernanke shouldn’t be reappointed as chairman of the Federal Reserve Board.

Legendary investor Warren Buffett isn’t one of them. “I don’t see how you could have anybody better than Ben Bernanke,” he told CNNMoney.com.

Last September, “We were at the very brink of just going into the abyss with our financial system,” Buffett said.

“Money market funds had broken the buck, commercial. paper had stopped. Payrolls weren’t going to be met very quickly unless the commercial paper market opened up,” the billionaire investment guru said.

And what transpired? “The key people, especially Bernanke did things very promptly, very decisively, very big. If they hadn’t done it, you and I might be meeting at McDonald’s instead of here” at this nice restaurant, Buffett said.

Without Bernanke’s skill, a second Great Depression “could easily” have ensued, he said.

But Buffett is worried about the inflationary implications of the massive fiscal and monetary stimulus.

“In attacking this problem we have properly done things that have opened the floodgates of money,” he said. “That poses the problem later on, not next month or next year, of very significant inflation. It’s much tougher to drain the system of excess money than it is to flood it.”

And Buffett’s worried whether the government can handle that.

He’s not the only one concerned about growing debt. “We’re looking now at something approaching $2 trillion of deficits. We’re terribly dependent on foreign capital,” legendary financier Pete Peterson told Moneynews.com.

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