Warren Buffett on Inflation

Warren Buffett wrote an interesting Op-Ed piece in the NY Times, The Greenback Effect, about the rising probability of inflation. In the article, he speculates that we’ll be forced to print money to pay off our debts, thereby starting the cycle of inflation.

An increase in federal debt can be financed in three ways: borrowing from foreigners, borrowing from our own citizens or, through a roundabout process, printing money.

I agree that without a reduction in government spending that it is highly likely that we will experience higher inflation.