Warren Buffett Blasts Trump in Annual Letter, Max Keiser Blasts Buffett

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Every year, analysts inspect Buffett's annual letter looking for successor hints. This year they found a blast of Trump.

Reuters reports Buffett Appears to Fault Trump, Laments Deals Dearth in Berkshire Letter.

Warren Buffett on Saturday appeared to fault U.S. President Donald Trump for taking too much credit for the nation’s economic growth, while acknowledging that market conditions are making it tough for his Berkshire Hathaway Inc to find more big companies to buy.

The 88-year-old said Berkshire’s success has been in part a product of “the American tailwind” that has enabled the country to enjoy “almost unbelievable prosperity.”

Buffett, who supported Democrat Hillary Clinton in her 2016 White House run, said no one person should claim credit when things go well.

“It is beyond arrogance for American businesses or individuals to boast that they have ‘done it alone,’” Buffett wrote.

Buffett also made a possible oblique criticism of Trump’s bragging about U.S. economic performance, including relative to other countries such as China, where Berkshire invests in electric car maker BYD Co.

The United States, according to Buffett, should “rejoice” when other countries have bright futures. “Americans will be both more prosperous and safer if all nations thrive,” he wrote. “At Berkshire, we hope to invest significant sums across borders.”

American Tailwind

Buffett's Annual Letter concluded:

Charlie and I happily acknowledge that much of Berkshire’s success has simply been a product of what I think should be called The American Tailwind. It is beyond arrogance for American businesses or individuals to boast that they have “done it alone.”

Over the next 77 years, however, the major source of our gains will almost certainly be provided by The American Tailwind. We are lucky – gloriously lucky – to have that force at our back.

Every year I hear nonsense about China overtaking the US, the yuan replacing the dollar, US hyperinflation and all sorts of other nonsense. Stop!

Wake me up when ...

  1. China respects property rights
  2. China respects human rights
  3. China floats the yuan
  4. China has the world's biggest bond market
  5. China is stops stealing technology
  6. China has free speech

If and when those things happen, we can discuss.

MAGA Slap

With the above in mind, I believe it's pretty clear who, and what, Buffett refers to.

It's a slap at Trump's slogan "Make American Great Again".

Trade Policy

Trump's trade policy is an outright disaster. He views trade as having a winner and a loser in every deal.

In real life, trade is a two-way street. if both sides do not think they benefit from the deal, there is no deal.

Ultimately, trade is between individuals, not countries, or even companies.

Companies only buy what they can sell to end consumer individuals. Tariffs interfere with that mechanism. Consumers lose every time via higher prices.

Standards of Living

Here's another fundamental point. Standards of living rise when prices drop!

Please ponder that again, and again, and again until it sinks in.

In what way is any individual worse of if the price of food drops, the price of education drops, the price of a home drops, the price of a car drops, the price of anything drops?

It is amusing, as well as very aggravating, that the Fed, socialists, Keynesians, and monetarists all bitch about "inequality" when rising prices and Fed-sponsored inflation is at the very heart of it.

Trump adds to the misery with seriously misguided tariff policy.

Max Keiser Blasts Warren Buffet as an ‘Unmitigated Fraud’

Also, consider Bitcoin Bull Max Keiser Blasts Billionaire Skeptic Warren Buffet as an ‘Unmitigated Fraud’

Buffett wrote:

Those who regularly preach doom because of government budget deficits (as I regularly did myself for many years) might note that our country’s national debt has increased roughly 400-fold during the last of my 77-year periods. That’s 40,000%! Suppose you had foreseen this increase and panicked at the prospect of runaway deficits and a worthless currency. To “protect” yourself, you might have eschewed stocks and opted instead to buy 31⁄4 ounces of gold with your $114.75.

And Keiser responded:

The real story is to put gold in context and understand that Buffett’s so-called success is entirely driven by a cozy relationship with Wall Street and the Fed that gives him virtually unlimited access to credit carrying zero percent interest.

Max and I are on opposite sides of Bitcoin, but Max has a valid point about Buffett's cozy relationships.

Mike "Mish" Shedlock

Comments (15)
No. 1-12
tz1
tz1

So when the price I'm paid for my labor drops, but the rest stays the same, my standard of living increases? So everyone should just work for free and there would be so much more labor productivity.

2banana
2banana

Buffet is an "investor" who made billions on insider bailout bank deals under obama. Deals unavailable to the public. With US Taxpayer guarantees in which he could not lose any money.

Under Trump - these deals have gone. And he has lost billions with his terrible investments in Wells Fargo and Kraft-Heinz.

Any questions?

stillCJ
stillCJ

Editor

88 year old Buffett also supported Obama, who rewarded him for that. I was thinking the Ogre of Omaha is getting senile, but more likely he's just mad at Donald for not rescuing his bad investments.

Ted R
Ted R

Max is exactly right about the old man Warren Buffet. Buffets 'fortune' is mostly paper assets. Personally I believe Buffet is just desperate for attention.

JonSellers
JonSellers

"Ultimately, trade is between individuals, not countries, or even companies."

But individuals don't trade in a vacuum. They trade within national and corporate policies and contexts.

The USA has a wildly over-inflated dollar which allows it to import manufactured products in exchange for treasury bonds. This gives the American "trader" a financial advantage over the American producer.

This gives the skimmer an advantage over the maker. That is the American policy of choice, imposed upon producers by financiers.

Ted R
Ted R

I think he is senile. Buffet makes me so sick. He knows damn well that interest rates are too low and and stocks are grossly overvalued.

Tengen
Tengen

Let us not forget that Buffett is believed to have received more TARP money than any other individual in the country. Our dear Uncle Warren puts the "crony" in crony capitalism.

That this guy is still held aloft as an example of what's right in America is an indicator of our decline.

1410
1410

Buffett has red mentality .

Casual_Observer
Casual_Observer

My prediction is Buffett ends up in the Howard Schultz or Michael Bloomberg 2020 campaigns. Even he must realize the Democratic party has lost its marbles. Oddly one would think Buffett would be happy with his returns thus far during the Trump administration. As long as the Fed, Treasury, banking cabal and power players are in place, we will continue to extend and pretend. Now this message from Amazon:

I watched the first episode last night the Cyprus had to give Russian oligarchs stakes in their banks because banking had grown to 900% of their economy.

Stuki
Stuki

"In what way is any individual worse of if the price of food drops, the price of education drops, the price of a home drops, the price of a car drops, the price of anything drops?"

In no way at all.

And, remember, that even includes stocks and bonds. Despite of what the indoctrination apparatus of financialized dystopias, are screeching from the rooftops.

DaninMaryland
DaninMaryland

This is a really dishonest and erroneous headline. Buffett isn't blasting Trump with that line. You are projecting your anti-Trump bias. The paragraph is this:

"Charlie and I happily acknowledge that much of Berkshire’s success has simply been a product of what I think should be called The American Tailwind. It is beyond arrogance for American businesses or individuals to boast that they have “done it alone.” The tidy rows of simple white crosses at Normandy should shame those who make such claims."

Buffett is talking about himself and Berkshire, obviously! Buffett is saying what he says in practically every annual letter. He says a bunch of great things about Berkshire and then says he, and Berkshire couldn't have done it alone but have achieved what they achieved in part due to the great fortune of being in America. This is a common theme in his letters. If you haven't noticed, Buffett concludes practically every recent letter with flag-waving patriotism, saying he couldn't have done it without America. This is what he always does!

There isn't one clearly negative thing about Trump in the letter. In fact, my biggest economic complaint on Trump, the yawning deficits, are apparently no big deal to Buffett.

Buffett is apparently quite sanguine about both the deficit and the political situation:

"Those who regularly preach doom because of government budget deficits (as I regularly did myself for many years) might note that our country’s national debt has increased roughly 400-fold during the last of my 77-year periods. That’s 40,000%! Suppose you had foreseen this increase and panicked at the prospect of runaway deficits and a worthless currency. To “protect” yourself, you might have eschewed stocks and opted instead to buy 31⁄4 ounces of gold with your $114.75. And what would that supposed protection have delivered? You would now have an asset worth about $4,200, less than 1% of what would have been realized from a simple unmanaged investment in American business. The magical metal was no match for the American mettle. Our country’s almost unbelievable prosperity has been gained in a bipartisan manner. Since 1942, we have had seven Republican presidents and seven Democrats. In the years they served, the country contended at various times with a long period of viral inflation, a 21% prime rate, several controversial and costly wars, the resignation of a president, a pervasive collapse in home values, a paralyzing financial panic and a host of other problems. All engendered scary headlines; all are now history."

I thought Buffett might have criticized the Democrats' alarming (to me) socialism, but that doesn't seem to trouble him either.

CCR
CCR

It is strange to say there are no winners or losers in a trade deal. Of course, there are winners and losers, leverage does exist, parity does not, for many reasons. Measuring the trade outcome in terms of time (Future Value) helps to determine who won. The accumulation of debt versus equity over time is the measuring stick. The prudent man thinks long term, the trade partner in the deal thinking long term wins, short term thinkers have a propensity to lose, impulsively. Domestically speaking, the housing bust created winners and losers. Internationally speaking the Yen carry trade created winners and losers. Measured in goods, Lockheed is skewering the US military and international militaries on arms. Who is winning the F35 "trade deal", I can tell you this, parity doesn't exist in that deal. Occam's razor is a fair way to think about a trade, but not entirely accurate, just ask anyone dealing with a large conglomerate who dictates prices, because they can.