Posted on 02 Apr 2015
Warren Buffett, the billionaire chief executive officer and chairman of Berkshire Hathaway Inc, said on
Tuesday that he would not raise interest rates significantly if he ran the Federal Reserve.
"I probably wouldn't do much," Buffett said when asked what he would do if he ran the Fed. "Things are working pretty well, and I would be worried that if I raised rates significantly with negative interest rates in Europe, I would be very worried about what that would do to the flow of funds."
He also noted that the economy "is improving month by month."
Buffett spoke at an automotive industry conference in New York, along with the chairman of the Berkshire Hathaway automotive dealer group, Larry Van Tuyl.
Buffett and Van Tuyl said that Berkshire Hathaway Automotive was actively looking to purchase more dealerships to add to the 81 auto dealerships it now owns in 10 states.
Warren Buffett, chairman and CEO of Berkshire Hathaway Inc, speaks at a National Auto Dealers Association event in New York on Tuesday.
Van Tuyl said that the company would look to expand in the United States and not internationally, at least for now.
Buffett said that Berkshire Hathaway would price auto dealerships for possible acquisition by using a long-term outlook and not allow short-term swings of the US auto market to affect purchase decisions.
He also said those purchase decisions would not be related to changes in interest rates.
"If (Federal Reserve chairwoman) Janet Yellen came up and whispered in my ear what she was going to do for the next two years, it wouldn't make any difference what we do. If we got a chance to buy a dealership at a sensible price with the right people, we'd buy it. We'd buy it in five minutes."
Buffett and Van Tuyl both said that while Tesla Motors Inc "has a model of selling cars directly to consumers, the volume is too low to affect the US auto distribution system.''
"Usually when a distribution system becomes that firmly established, there is a reason for it. I just don't see that changing," said Buffett.
He said that self-driving cars "will be a reality" but that he expects autonomous cars to be less than 10% of the auto market by 2030.
Buffett, who also owns auto insurance company Geico, offered a grim example of the kinds of dilemmas that will have to be resolved for acceptance of self-driving cars.
"A self-driver is coming down the road and three-year-old kid runs out in front. Another car's coming down the street the other way. Do you hit the kid or the other car? The computer makes the decision," he said.
Earlier on Tuesday, Buffett said a Greek exit could be constructive for the euro zone.
"If it turns out the Greeks leave, that may not be a bad thing for the euro," Buffetttold told CNBC in an interview. "If everybody learns that the rules mean something and if they come to general agreement about fiscal policy among members, or something of the sort, that they mean business, that could be a good thing."
Europe's most-indebted state is locked in negotiations with euro zone countries and the International Monetary Fund over the terms of its €240 billion ($260 billion) rescue.
The standoff, which has left Greece dependent upon European Central Bank loans, risks leading to a default within weeks and its potential exit from the euro zone.
Greek Prime Minister Alexis Tsipras sought to rally a consensus in Parliament late Monday in Athens for an effort to secure bailout funds after proposals to bolster the nation's finances failed to satisfy his European creditors.
"I've thought that the euro had structural problems right from the moment that it was put it in, which does not mean it will necessarily fail," Buffett said. "You can adapt to those structural problems, but maybe some countries won't adapt and they won't be in. It's not ordained that the euro has to have exactly the members that it has today."
Charles Munger, vice chairman at Buffett's Berkshire, criticised Greek citizens last week for trying to vote their way to prosperity.
The country's politics were shaken up in January when Tsipras's Syriza party won election on a pledge to ease austerity and negotiate a writedown of some of the country's debt.
Buffett told CNBC that, over time, the countries in the euro area would need to better coordinate their labour laws, fiscal deficits and general management of their economies.
