CARL:  Warren, the last time you were with Becky, I believe it was during -

BECKY:  About a month ago.

CARL:  Yeah, about a month ago.  And at the time I recall you talking a lot about inflation, not anytime soon necessarily, but certainly a couple of years down the road.  CPI is running at the lowest level since the 50s.  Bernanke doesn't seem too worried about it, judging from his testimony.  Is your concern on the wane or on the rise?

BUFFETT:  On the rise.  Very simple answer.  But it isn't because it's going to happen next week or next month or ten months from now.  But ten years from now the dollar will buy a lot less than it buys now.  That will be the consequence of what we're doing now.  That doesn't mean what we're doing now is wrong at all.  We're doing the right things, but what we're doing have consequences.  And some of the medicines we're delivering, it will be very hard to deliver a total offset to.           

CARL:  And is that change in the dollar's value, it's going to be disruptive obviously, but will it be violent in any way?

BUFFETT:  Who knows?   Listen, I didn't know what was going to happen the last two years.  Why should I know what's going to happen the next two years?  But, stay tuned to the Secret Millionaire's Club and maybe at some point we'll let it out.

CARL:  Oh good.  We can have one on the dollar collapse.  That'll be --

BUFFETT:  Yeah, the dollar.  You definitely - We won't do it until the fourth or fifth episode but we want to get you hooked.  (Laughs.)

BECKY:  Now, Warren, you talk about your views on inflation and you use very long-term timeframes.   Right now versus ten years.  When Ben Bernanke was speaking to Congress earlier this week, he talked about some of these things, too, saying this is not necessarily something we need to worry about over the near-term.  He's probably talking a couple of years down the road.  Are you kind of in sync with what Bernanke was telling Congress earlier this week?

BUFFETT:  I don't think you can have anybody better than Bernanke in the job.  I mean, he understands all of the issues.  But the time to worry about something that's going to happen in the long-term is in the short-term.  And I'll guarantee you that he is thinking about that.  But he needs to do what he's doing now.  And the Fed needs to be doing what it's doing now.  It will have, it will have after-effects, and we'll be facing those, and they'll be addressed at that time.  But I don't think you can do what we're doing now, and are going to be doing, without having real inflationary possibilities down the road.  But that doesn't mean I think he's doing the wrong thing.  I think he's doing the right thing.

JOE:  Just thinking about those puts, Warren.  You didn't have to mark those to market necessarily, but just thinking about this week, you cleaned up this week.

BUFFETT:  But that -- (laughs.)

JOE:  I know, I know, but how much money - we're talking billions probably this week, are we not in those puts?

BUFFETT:  We move the numbers around, but no cash changes hands.  We got 4.8 billion originally, we're going to hold onto it for 15 or so years and then we'll see what happens.

JOE:  Well, it's worth a, I mean you had a billion dollar week, I think, and you can say it.  You can celebrate a little.  It's Friday too, right?

BUFFETT:  (Laughs.)  Well, I'll have a Cherry Coke later on.

CARL:  Like that would be any different.

JOE:  He's a wild man.  Have two of them.

BECKY:  I bet he knows to the penny -

JOE:  I bet you do know to the penny exactly, yeah, that's what Becky said.  You probably know to the penny but you're not going to tell me.

CARL:  How about the Moody's

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[MCO  Loading...      ()   ] stake cut, Warren?  Can you shed any light on it.  It got a lot of attention this week.

BUFFETT:  No, I can't shed any light on it.  (Laughs.)  We're straying a little bit from the Secret Millionaire's Club.  Hubert Humphrey, the famous Senator Hubert Humphrey, who I admired, his advice on speaking, he said never talk about father on Mother's Day.   (Laughs.)  This is Mother's Day.

JOE:  But you love this.  You've given us time in the past and we try to visit everything.  I'm going to, we're going to - should we go to a break and then we'll come back?  I do have one question I definitely want to ask you after we come back from break.  Should we go to break and then come back?  OK, good.  Here it is.  Here it is.  You're an insurance guy, you've done well with insurance.  Do you think it's possible to have private insurers co-exist if there is a public plan in health care?

BUFFETT:  Well, they co-exist with annuities right now with Social Security.  You can buy income for your old age, my age.  (Laughs.)  You get it from Social Security and you can buy it from the government.   I think the whole - listen, I'm not an expert on health care reform.  I mean, there are millions of people who know a lot more -

JOE:  Then you can be in Congress.

BUFFETT:  Well, that's true.  Maybe I can even be chairman of the committee.

JOE:  Exactly.  We'll put you up for that.  (Buffett laughs.)  You know what I'm asking.  I mean, should reform have a public option or is it better to keep it market-based to try to hold down the costs?

BUFFETT:  Reform is a, I mean, it is a - When you try to reform or rearrange one-sixth of the economy, that is huge.  It's an enormous problem.  I don't think I bring special knowledge to it.  I think it's needed.  When we're spending the kind of percentage of GDP that we're spending, something has to happen.   And what we get out of Congress won't be perfect.  The question is whether it will be an improvement, and I don't know the answer to that yet.

BECKY:  Hey Warren, Jim Nussle is here today, the former head of the OMB.

NUSSLE:  Yeah, Warren.  Sticking to your Secret Millionaire's Club and the principles that you have there, I mean, the concern that I think so many people out in the country are having there, is are we adding to the credit card bill with this health care reform?  Are we just going to add more deficit and debt?  And at what point in time is it unsustainable?  It seems like the deficits are just going up and the health care bill doesn't do anything to reform the already unsustainable growth in these health care programs.  At what point in time is it a complete and total drag on the economy and we can't lay off that debt on some of the international markets?

BUFFETT:  Spending a sixth of your GDP on, is already a drag on the economy.  I mean, that is diverting a lot of dollars that other countries aren't, to health care.  So, if we can figure out a better way to do it it will have beneficial effects regarding the financing.   We just need to figure out a way to pay for people staying well rather than on what's prescribed for them and the amount of the prescriptions that take place.  It's a tough problem to reform the whole economy on something that huge.  But the real question is whether we can come up with something better.  In terms of the debt question, we came out of World War II with the national debt at 120 percent of GDP and there were all kinds of dire forecasts.  This country works over time.  We are in a movie that's kind of an unpleasant movie and we haven't seen this movie before and I can't tell you how long it's going to last.  But I can tell you it has a happy ending.   This country works.  And we make mistakes along the way, but they get addressed eventually.  So I'm not worried about the long-term future at all.  On the other hand, you don't want to see debt as a percentage of GDP just continuously increase.  Fortunately, we started from a pretty low level in the 30 percent level so we can take more.  But you don't want to get addicted to huge deficits.

BECKY:  You know, Warren, you're talking about the economy.  You mentioned that business really hasn't turned, it's remained flat.   But there have been a lot of predictions about what happens to the unemployment rate.  We had Meredith Whitney on our show.  She said that unemployment could go as high as 13 percent.  You had mentioned that you've had, in the past, very big concerns about where our unemployment is headed.  But does a number like that sound like something that fits into your forecast?

BUFFETT:  Well, I think that if we had 13 percent, people will be watching CNBC all day.  I don't, I don't know, you know, I don't know how bad things can get in terms of unemployment.  I don't know how bad things can get in terms of the economy.  I do know that we'll come out the other side and it'll be better than ever.  But there's no way, there's no way, there's no way to predict how high it can go.  It's going to go higher than it is now and I do not see when that ends but it will end.

JOE:  You're doing this, you're partnering up with AOL to some extent, I guess, on this, Warren.

BUFFETT:  Well, Andy is the - I'm just a bit actor in this thing -

JOE:  Oh, you are?

BUFFETT:  But like I said, I'm hoping for big things obviously.

JOE:  We're back to the voiceover proceeds that we're talking about, that's why, yeah, we figured that out.   Alright, but --

BUFFETT: OK.

JOE: You have an idea about the business?  People have written off AOL in the past.  It looks like they're trying to move to some kind of content-based organization.  Much more content-based.   Do you have any idea how that's gonna, I mean, is that going to be successful?

BUFFETT:  Very few people ask me for my advice on the Internet, (laughs), and the ones who do don't pay any attention, Joe.  So I can't really help you much on that.  So I just want to say, thanks for having me, but I can't tell you what any company on the Internet's future is.

BECKY:  Alright, Warren, we want to thank you very much for your time today.  It's - we really appreciate you coming by.  And again, thanks for showing off the new webisodes here.

BUFFETT:  OK.  Good bye, and thanks for having me.

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