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Warren Buffett: Recession Not Over.  There Won't Be A Second Dip

Sept. 27, 2010 by Sally Peters

Well known investor and billionaire Warren Buffett believes that contrary to a report that was recently published, the recession is not over because most people and businesses still have not recovered from the financial crisis.

Warren Buffett shared his viewpoint last Thursday on CNBC when he talked about the economy and his company, Berkshire Hathaway.

"We're still in a recession. And we're not gonna be out of it for awhile, but we will get out of it." Buffett says.  However, when will we get out of it?  Will we have a recession similar to what Japan experienced in the last 20 years?  Buffett does not answer the question but he has an advantage in getting insights of the status economy as his Omaha-based company owns businesses in a variety of sectors such as clothing, insurance, railroad, furniture, utility, jewelry and corporate jet companies.

For example, the Burlington Northern Santa Fe railroad owned by Buffett, is only about 61 percent of the way back to its peak shipping volumes from the bottom of the recession.

Another business, Shaw Carpet, used to sell about 13 million yards of carpet a week. It fell to about 7 million yards during the recession, 6,500 jobs were eliminated. So far it's only selling about 9 million yards a week, and it won't start hiring again until it sells 10 million yards a week.

Buffett believes that the US economy will recover with the help of government's stimulus efforts.  However, others disagree.  Jim Rogers, for example, believes that the US government is printing too much money, and that this will cause potential inflation and the increase of prices of commodities and raw materials. 

Buffett, thus, is optimistic about the economy, while Jim Rogers is optimistic about the prices of commodities.