FORTUNE -- Warren Buffett has a piece of advice for Ben Bernanke: It's easier to buy than it is to sell.
Buffett, speaking on Saturday at Berkshire Hathaway's (BRKA) annual meeting in Omaha, said he is worried about what will happen when the Federal Reserve tries to wind down its recent efforts to stimulate the economy. Via a program nicknamed QE, short for quantitative easing, the Fed in recent years has bought up over $2 trillion in bonds in order to lower interest rates and promote borrowing and investment.
Some have warned that when the Fed decides to sell its trove of bonds, or even just stops adding to it, stock markets could tank. Rising interest rates could cause banks to lose billions, perhaps igniting another financial crisis. Buffett says we don't know what will happen, but he is concerned.
"QE is like watching a good movie, because I don't know how it will end," says Buffett. "Anyone who owns stocks will reevaluate his hand when it happens, and that will happen very quickly."
Buffett says he has enormous respect for Bernanke. And he says the economy, and Berkshire, have "benefited significantly" from quantitative easing. Low interest rates are allowing Berkshire to do deals it wouldn't have done in the past, he said, citing the recent Heinz deal. And he doesn't think low interest rates are discouraging banks from lending. He says he knows Wells Fargo (WFC), of which Buffett is a large shareholder, is doing everything it can to find borrowers.
Nonetheless, Buffett says the Fed's moves have the ability to cause a lot of inflation. And that it may not always be promoting the best decision making.
"People make different decisions when they can borrow for practically nothing," says Buffett. "It's a huge experiment."
Charlie Munger, Buffett's long-term chief lieutenant, who was also talking at the meeting, says he worries about more than just inflation.
"What has happened in macroeconomics has surprised pretty much everyone," says Munger. "Given that history, economists should be more cautious when they print money in massive amounts."
Top strategist at Blackrock says the economy is stronger than it looks, which will lead to rising interest rates and pain for debt investors. But the evidence otherwise is too strong.
FORTUNE -- Ben Bernanke is missing the recovery.
That's the view of Blackrock strategist Rick Rieder. In an interview with the Financial Times, Rieder, who is officially Blackrock's chief investment officer for fixed income, fundamental portfolios, said it's time for the MOREStephen Gandel, senior editor - Apr 10, 2013 5:00 AM ET
Ben Bernanke's policy of low interest rates is meant to boost lending. But a new study shows that as banks have gotten bigger, the Fed has become less powerful.
FORTUNE -- Call it Bernanke's folly. Or quagmire. Or both.
A new study, which was published on Monday by the National Bureau of Economic Research, suggests that the Federal Reserve's policy of using ultra-low interest rates in order to encourage lending, might be MOREStephen Gandel, senior editor - Mar 5, 2013 5:00 AM ET
The commodities expert says the Fed is throwing fake money after bad debts, and we're all going to suffer.
FORTUNE -- Jim Rogers does not want you to get the wrong idea. He thinks Ben Bernanke is doing a really, really, really bad job as Federal Reserve Chairman.
In his most recent book, Street Smarts, Rogers says that if you are to look back at Bernanke's predictions over the past few years, MOREStephen Gandel, senior editor - Feb 13, 2013 9:33 AM ET
Ben Bernanke's low interest rate policy has driven down the dollar. America's trading partners aren't happy.
FORTUNE -- What do Rogaine and the Federal Reserve's economic-stimulus policies have in common? No, it doesn't involve Ben Bernanke's or Alan Greenspan's hairlines. Give up? The answer: side effects.
Rogaine, as you may know, was originally developed as a blood pressure medication but was "repurposed" because it had the side effect of promoting hair growth. MOREAllan Sloan, senior editor-at-large - Jan 16, 2013 5:00 AM ET
The political compromise does little to address the consistent headwinds that undermine growth, hold back corporate investment, and dampen job creation.
By Mohamed El-Erian
FORTUNE -- The compromise reached by Congress, after multiple rounds of painful negotiations, makes some political sense. The economic benefits are mixed, at best. The social dimension is notable, but will need to be quickly reinforced by measures to reinvigorate economic growth and job creation.
The political MOREJan 2, 2013 6:47 AM ET
Is the Federal Reserve's stimulus effort holding back the economy instead of helping it?
FORTUNE -- The Federal Reserve may soon steal a catch phrase from Buzz Lightyear: To infinity and beyond.
The Federal Reserve is meeting this week, and it looks likely that Bernanke & Co. will announce that it will boost its latest bond buying effort, which has been dubbed QE Infinity. So called quantitative easing, which is what happens MOREStephen Gandel, senior editor - Dec 11, 2012 5:00 AM ET
The Fed's bond buying spree has yet to help credit card borrowers.
FORTUNE -- Interest rates are the lowest they have been in decades. But there's little indication the customers of lender Capital One Financial (COF) are benefiting. In the company's most recent quarter, loans made by Capital One, which gets about half its revenue from credit cards, generated nearly $4 billion in interest income. That was $900 million more than MOREStephen Gandel, senior editor - Sep 24, 2012 5:00 AM ET
Everyone assumes financial firms are on the mend, but that may not be the case.
FORTUNE -- Here's another reason we need Ben Bernanke's QE3: Lending remains weak.
In the most recent quarter bank deposits grew twice as fast as loans, according to a report from bank research firm SNL Financial, which looked at U.S. lending capacity. Banks typically make money by paying a low interest rate for deposits, and then lending MOREStephen Gandel, senior editor - Sep 13, 2012 3:21 PM ET
Are super-low interest rates really the answer to our economic woes, particularly at a time brimming with uncertainty and tighter lending standards?
FORTUNE – Yet again, the Fed-gasm continues.
To give the U.S. economy an extra boost, Fed policymakers on Thursday launched another round of bond purchases -- an additional $40 billion worth a month. The move would have been an unusual step for the central bank years ago, but since the MORENin-Hai Tseng, Writer - Sep 13, 2012 2:37 PM ET
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