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Warren Buffett: Not Raising Debt Ceiling Would Be 'Most Asinine Act' Ever By Congress

Buffett Economy

First Posted: 05/02/11 09:24 AM ET Updated: 07/02/11 06:12 AM ET

OMAHA, Nebraska (Ben Berkowitz) - Warren Buffett does not spend his time making stock research recommendations, but he is sure of one thing -- America should have a "strong buy" slapped on it.

Tens of thousands of Berkshire Hathaway shareholders who descended on Omaha this weekend for the conglomerate's annual meeting got one unmistakable message from Buffett -- no matter how bad the economy, or the deficit, or the political divide, the United States is as good a place to live and work as ever.

"I don't see how anybody can be other than enthused about this country," Buffett told Berkshire shareholders on Saturday.

Buffett, often called the "Oracle of Omaha," is one of the world's richest men and leads a conglomerate that owns railroads, insurers and ice cream parlors.

The comments echo those Buffett made in February in his annual shareholder letter, but the words still may encourage investors looking sideways at the country, particularly after Standard & Poor's put the U.S. government's critical "AAA" credit rating on a negative credit watch.

Buffett told Reuters Insider that S&P's move was premature, given the U.S. government issues debt only in dollars and can simply print more money to pay debt if absolutely needed.

"The United States is not going to default on any obligation," Buffett told Insider in an interview after the annual meeting. "We are not a credit risk, believe me."

Where Buffett's enthusiasm wanes to any degree, it is mostly in conversation on the dollar, which he said is sure to weaken over time, like most other currencies.

Buffett, as usual, said he was shying away from fixed-income investments for Berkshire's part, even as he keeps some of his personal wealth in Treasuries for safety's sake.

Some worry that safety could be threatened by the debate over the national debt ceiling, an issue that has divided Congress in recent weeks and gotten more tense as the country gets closer to its legal limit on debt issuance.

Buffett, asked about the possibility Congress would not raise the ceiling, made one of his most-repeated comments of the whole weekend, saying it would be the legislature's "most asinine act" in its history.

Buffett also affirmed his support for the banking sector, where he has big bets on Wells Fargo and U.S. Bancorp, calling the odds of another banking crisis "very very low."

His partner, Vice Chairman Charlie Munger, was less sanguine about Europe and the effects of the sovereign debt crisis, saying the continent has "a hell of a problem" in comparison.

(Reporting by Ben Berkowitz, editing by Maureen Bavdek, Bernard Orr)

Copyright 2011 Thomson Reuters. Click for Restrictions.

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Filed by Maxwell Strachan  |