Buffett Bucks The Trend: Bond Portfolio Positioned For INFLATION

warrenbuffett concerned tbi

BREAKING! Not every major investment guru is walking further out on the yield curve in a bet on deflation.


20-one per cent of holdings including Treasuries, municipal debt, foreign-government securities and corporate bonds were due in one year or less as of June 30, Omaha, Nebraska-based Berkshire said in a filing Aug. 6. That compares with 18 per cent on March 31, and 16 per cent at the end of last year’s second quarter.

The report goes on to speculate that this may be a reaction to heightened inflation expectation, which would be in violent disagreement with the cool-kid investors these days, who are almost uniformly deflationistas these days.

But Buffett has maintained a fairly standard-issue stance on the subject.

Back to Bloomberg:

Buffett, 79, urged Congress last year to guard against inflation as the U.S. economy returned to growth. In an August 2009 op-ed in the New York Times, the Berkshire chief executive officer said government must address the “monetary medicine” that was pumped into the financial system after the 2008 crisis.

“The United States is spewing a potentially damaging substance into our economy — greenback emissions,” Buffett wrote. “Unchecked greenback emissions will certainly cause the purchasing power of currency to melt.” Buffett didn’t return a message for comment left with an assistant.

For what it’s worth, Buffett may have other ideas in mind, including a move towards liquidity and stability, and if he’s made a ton of money betting on long-bonds, then it makes sense to take something off the table. Still, it’s an interesting shift.

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