Prem Watsa, Chairman and CEO of Fairfax Financial Holdings, has often been referred to as “Canada’s Warren Buffett” due to his successful insurance and investing track record. However, in a recent interview with canada.com, Mr. Watsa expressed very different views regarding inflation compared to Warren Buffett’s recent statements on the subject. A few excerpts from the interview appear in this article.
Warren Buffett has commented on the massive “greenback emissions” and the tendency of politicians for favor monetizing debt rather than imposing more obvious choices such as tax increases or spending cuts. Gary Shilling, President of A. Gary Shilling & Co. has taken the other side of the debate in a recent interview with Steve Forbes. Mr. Shilling has a long track record of prescient macroeconomic forecasts and was one of the few economists to predict the disinflation of the 1980s. Read this article for more details and a link to the video.
As the Financial Times reported today, inflation expectations in the United States and the UK have been reaching levels not seen since late last year. In the case of the United States, implied inflation expectations appear to be pushing past 2%. Read this article for more details and charts.
An article by Ravi Nagarajan regarding using Series I savings bonds as an alternative to one year Treasury Bills appeared today exclusively on GuruFocus.com. Read this post for a link to the article on GuruFocus.com.
With one year Treasury Bills yielding 0.35% and even the highest yielding one year Certificate of Deposit paying under 2%, investors are searching for higher returns on idle cash while maintaining safety of principal. There have been very few options available for investors in recent months and the luxury of holding cash has meant suffering negative real returns. An interesting opportunity now exists for investors to obtain higher yields for small amounts of cash.