Warren Edward Buffett, who is one of the world’s major investors also called “Oracle of Omaha”, is pretty sure that the actions of the U.S. Federal Reserve System and the central banks of other countries have a negative influence. Their attempts to stimulate the economy caused the investors and shareholders serious losses. At the Berkshire Hathaway annual meeting in Nebraska, Buffett said that he felt sorry for the people who invested money in the fixed-income instruments.
First of all, these actions harmed the pension funds. That means that this stimulation program implementation was paid by the pensioners. However, at that time such emergency measures were vital, and without them the consequences for the economy would have been terrible.
“Bernanke made a tough choice,” noticed Oracle. “He decided to ease the monetary police up that provoked the decline in bond yields. And he still holds his foot on the brakes that makes the situation for the investors dealing with fixed-income instruments complicated.” The hard race has been observed on the stock markets for the last nine months that allowed the American stock indexes to reach new highs. The investors that put their capital into the short-term Treasury bonds could not participate in this race. “That is a serious mistake. I do not know what I would do in this situation,” announced Warren Edward Buffett.
Friday put everything in its place. For the first time ever the SPI 500 exceeded 1600 points, and the U.S. stock market demonstrated an epic rally.