Buffett Shortens Bond Durations On Inflation Concerns
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Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) has shortened the duration of the bonds that it holds due to the warnings of potential deficit spending pushing inflation higher, according to a report from Bloomberg.
According to a corporate filing on August 6, 21 percent of Berkshire’s holdings were due in one year or less. The holdings include Treasuries, municipal debt, foreign-government securities and corporate bonds.
The rate of bonds coming due in a year or less in the previous quarter was 18 percent, and at the end of last year’s second quarter the rate was 16 percent.
Buffett has implored the government to take actions to safeguard against inflation as the economy recovers from the recession and starts to grow again.
“The United States is spewing a potentially damaging substance into our economy -- greenback emissions,” Buffett wrote said in a op-ed piece with the New York Times a year ago. “Unchecked greenback emissions will certainly cause the purchasing power of currency to melt.”
The indicators for inflation have remained nonexistent, as the Labor Department said that the consumer price index excluding food and energy held at a 0.9 percent increase in the three month period ended in June, and economists expect that the rate will remain unchanged in July.
Inflation has fallen to a 44-year low, despite the Federal Reserve doubling its balance sheet in the last two years to $2.33 trillion to attempt to stimulate the economic recovery that has at best trudged forward recently.
According to a corporate filing on August 6, 21 percent of Berkshire’s holdings were due in one year or less. The holdings include Treasuries, municipal debt, foreign-government securities and corporate bonds.
The rate of bonds coming due in a year or less in the previous quarter was 18 percent, and at the end of last year’s second quarter the rate was 16 percent.
Buffett has implored the government to take actions to safeguard against inflation as the economy recovers from the recession and starts to grow again.
“The United States is spewing a potentially damaging substance into our economy -- greenback emissions,” Buffett wrote said in a op-ed piece with the New York Times a year ago. “Unchecked greenback emissions will certainly cause the purchasing power of currency to melt.”
The indicators for inflation have remained nonexistent, as the Labor Department said that the consumer price index excluding food and energy held at a 0.9 percent increase in the three month period ended in June, and economists expect that the rate will remain unchanged in July.
Inflation has fallen to a 44-year low, despite the Federal Reserve doubling its balance sheet in the last two years to $2.33 trillion to attempt to stimulate the economic recovery that has at best trudged forward recently.
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