Buffett: Prepare for Inflation

So, how's the government handling the economic crisis? Not bad, says Warren Buffett. The billionaire, speaking today at the annual meeting of Berkshire Hathaway shareholders, defended the Obama administration's response to the recession, which he called "as close to a total meltdown as you can imagine." But he warned that the purchasing power of the dollar could fall as the government tries to pay for all of its rescue plans. One way or another, he said, the $700 billion Troubled Asset Relief Program and the $787 billion fiscal stimulus plan will have to be financed. With no indication that taxes will be raised, a sure way to pay for the spending will be to inflate the value of the dollar. "I haven't had my taxes raised," he said. "My guess is the ultimate price will be paid by a shrinkage of the value of the dollar." Buffett, 78, who has run Berkshire for 40 years, also said a new CEO would come from within the company.