Federal Reserve: The Hedge Fund of Hedge Funds
“The Fed is the greatest hedge fund in history,” Buffett told students yesterday at Georgetown University in Washington. It’s generating “$80 billion or $90 billion a year probably in revenue for the U.S. government", he said. “And that wasn’t the case a few years back.”
The Federal Reserve has been said to be buying $85 billion in bonds a month to help the U.S. recover out of the economic hole we're stuck in.
Buffet said “the Fed is under no pressure, none whatsoever to have to deleverage." “So it can pick its time, and if you have somebody wise there -- and I think Bernanke is wise, and I certainly expect his successor to be -- it can be handled. But it is something that’s never quite been done on this scale. It will be interesting to watch.”
What do you guys think? Is the Federal Reserve really the "greatest hedge fund in history" as Buffett declared?
The words "Hedge" and "Fund" get thrown around way too easily nowadays. I think that's a huge insult to the people actually generating profit w/ sound strategy and REAL dollars. The Fed is more representative of a Ponzi scheme than anything else.
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