Warren Buffett, chairman and CEO of Berkshire Hathaway, asserted during the company's annual shareholder meeting that there is currently no viable alternative to the U.S. dollar as the world's reserve currency, while revealing that Berkshire's cash pile has reached $188 billion.The 93-year-old investment icon addressed concerns about the growing U.S. national debt, which has expanded more than 60% since the end of 2019 to $27 trillion — roughly six times its size before the 2008-09 financial crisis.
Buffett's View on Dollar and U.S. Debt
When asked whether global markets might eventually reject the increasing supply of U.S. Treasury bonds, Buffett responded: "My best speculation is that U.S. debt will be acceptable for a very long time because there's not much alternative." He elaborated that the real danger is not the quantity of debt, but the potential for inflation to spiral out of control and threaten the global economy. "There really isn't any alternative to the dollar as a reserve currency," he stressed.
Praise for Fed Chair Powell
Buffett had high praise for Federal Reserve Chairman Jerome Powell, calling him "not only a great human being but a very wise man." However, he noted that Powell does not control fiscal policy. "Every now and then, he sends out a disguised plea: 'Please pay attention to this because that's where the trouble will be if we have it,'" Buffett said, underscoring the need for fiscal discipline.
Berkshire's Cash Hoard Strategy
Regarding Berkshire's $188 billion cash reserve — a record level — Buffett explained why he has not deployed it aggressively. "I don't think anybody sitting at this table has any idea of how to use it effectively. And therefore, we don't use it … We only swing at pitches we like." He added that when he compares cash to alternatives in the equity markets and the global economic landscape, holding cash "is quite attractive."
This cautious stance aligns with Buffett's long-standing principle of keeping dry powder for times of crisis. The large cash reserve suggests that either Berkshire sees few compelling investment opportunities at current valuations, or it is patiently waiting for a market downturn to make big acquisitions. Historically, Buffett has used cash during market panics to buy undervalued assets, such as during the 2008 financial crisis and the 2020 pandemic.
Investors and analysts will be watching closely to see if Berkshire eventually puts its massive cash hoard to work, especially as interest rates remain elevated and stock valuations appear stretched in some sectors.