Warren Buffett Issues Alert on the US Economy

Billionaire Warren Buffett recently shared insights on the state of the US economy in Berkshire Hathaway’s annual letter to shareholders.

Buffett warns that the stability and purchasing power of the US dollar can be easily damaged:
> “Paper money can see its value evaporate if fiscal folly prevails. In some countries, this reckless practice has become habitual, and, in our country’s short history, the U.S. has come close to the edge. Fixed-coupon bonds provide no protection against runaway currency.”

He highlights that capitalism is facing unprecedented levels of abuse within the system, yet its ability to foster prosperity remains unrivaled:
> “One way or another, the sensible – better yet imaginative – deployment of savings by citizens is required to propel an ever-growing societal output of desired goods and services. This system is called capitalism.”

Buffett acknowledges the flaws and abuses present in capitalism, stating:
> “It has its faults and abuses – in certain respects more egregious now than ever – but it also can work wonders unmatched by other economic systems…”

He reflects on the American experience, noting the existence of malfeasance and the challenges faced:
> “The American process has not always been pretty – our country has forever had many scoundrels and promoters who seek to take advantage of those who mistakenly trust them with their savings. But even with such malfeasance – which remains in full force today – and also much deployment of capital that eventually floundered because of brutal competition or disruptive innovation, the savings of Americans has delivered a quantity and quality of output beyond the dreams of any colonist.”

At 94 years old, Buffett mentions that his tenure as CEO of Berkshire Hathaway will soon come to an end:
> “At 94, it won’t be long before Greg Abel replaces me as CEO and will be writing the annual letters…”

He emphasizes the impartiality in the choice of equity vehicles, stating:
> “We are impartial in our choice of equity vehicles, investing in either variety based upon where we can best deploy your (and my family’s) savings. Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities. Greg has vividly shown his ability to act at such times as did Charlie.”

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