Economy Has 'Fallen Off a Cliff': Buffett

Warren Buffett said today the US economy has “fallen off a cliff,” but guaranteed that 5 years from now “the machine will be running fine.” On CNBC, Buffett encouraged banks to “get back to banking,” saying they will have to earn their way out of the crisis. Also key, the billionaire investor said, was bipartisan support of federal efforts aimed at restoring confidence.

Buffett also warned that recovery—still some ways off, with the economy still in “close to the worst-case” scenario—could spur inflation akin to that of the late 1970s, Reuters adds. “In economics there is no free lunch,” he said. “We are going to attempt to have a lunch that to some extent we're going to pay for later.” (More Warren Buffett stories.)