Billionaire investor Warren Buffett says the economy has passed its lowest point and, while recovering slowly, is clearly on the way back up.
"I am not sure about exact quarters or anything of the sort. Who knows about next week or next month?
“We made enormous progress since a year ago. We had a real panic. And if you didn’t panic, you didn’t understand what was going on,” Buffett told Business Wire in an interview.
Buffett credits the outgoing Bush administration for making the right moves in the fall of 2009 and into the transition to a new government to keep the financial system from completely collapsing.
“While the governmental authorities malign things sometimes, they fortunately did some very right things, very important things. They did them properly, and they kept us from going over the cliff.”
He also said that, while problems remain, the basic capitalist system underneath is healthy and in no need of significant reform.
“If you look at this country, we have gone through the Great Depression, we have gone through world wars, we have gone through civil war, and we have progressed like no country in the world. We have the right system,” Buffett said.
“It doesn’t avoid all the problems, but it overcomes all the problems,”
Buffett said that he does not see consumer spending rebounding short term. He noted that the unemployment rate would like continue to be high, since job creation always lags a recovery.
While he welcomes financial reforms being made in the federal level, Buffett warned that government’s role, while important, is naturally limited by human nature.
“You can’t rule out human emotions. When people get greedy as a pack, strange things happen. When they get fearful as a pack, strange things happen,” he said.
“Rules will help us avoid some of the problems. They’ll help us modify some of the problems, but they won’t eliminate all future problems.”
As for stocks, Buffett declined to predict that they would be higher in a year, but was more positive about five to 10 years out.
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