> Warren Buffett Blog: Warren Buffet compares the Federal Reserve Bank to a hedge fund, calls it 'the ... - Daily Mail

Tuesday, September 24, 2013

Warren Buffet compares the Federal Reserve Bank to a hedge fund, calls it 'the ... - Daily Mail

One of the world’s richest men is comparing the Federal Reserve to a hedge fund, and heaping praise on a policy seen as misguided by some.


Warren Buffet, 82, made the comparison Thursday during an interview at Georgetown University, in Washington, D.C., while discussing the central bank’s quantitative easing policy – but another billionaire criticized the program, calling it a reverse-redistribution of wealth.


Quantitative easing saw the US government purchasing over $1.3trillion in securities at a clip of as much as $85billion per month.  The policy was enacted at the height of the recession to save the financial markets from total collapse.


‘The Fed is the greatest hedge fund in history,’ said Mr Buffet.


The ‘Oracle of Omaha’ made the comparison only one day after the Fed made public plans to push back the long wind-down of the program, said the Telegraph.


The policy has stabilized financial markets to the point they are reaching highs never before seen, even setting closing records several times in recent months.


The billionaire also said he would reappoint current Fed chairman Ben Bernanke to a second term, if it were up to him, the Telegraph reported.


‘Since the panic of five years ago, he's done a terrific job,’ Buffet said, adding when asked if he would reappoint the former Princeton University professor ‘that’s what I would do.’

Keep him!: Buffet also advocated for the reappointment of Fed chair Ben Bernanke at the end of his current term


Mr Buffet, head of Berkshire Hathaway, did warn that the government’s eventual exit from the securities business may not be as easy as its entry.


‘We are in an experiment which hasn't really been tried before,’ he said, according to the Telegraph, ‘buying securities is usually easier than selling securities.’


The Fed’s quantitative easing purchases have been a combination of Federal Treasury bonds and mortgage-backed securities.