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CNBC EXCERPTS: BILLIONAIRE INVESTOR WARREN BUFFETT ON CNBC'S "SQUAWK BOX" TODAY

WHEN: TODAY, WEDNESDAY, MARCH 2ND 6AM-9AM ET

WHERE: CNBC'S"SQUAWK BOX"

Following are excerpts of the unofficial transcript of a CNBC interview with Berkshire Hathaway Chairman & CEO Warren Buffett today on CNBC's "Squawk Box." The full transcript will be available at buffettwatch.cnbc.com.

All references must be sourced the CNBC.

Buffett on Oil:

YOU MAY WORRY AS A CITIZEN ABOUT WHAT'S HAPPENING, BUT IN TERMS OF OUR INVESTMENTS, NO. DOESN'T HAVE ANYTHING TO DO WITH WHERE GEICO OR COCA-COLA WILL BE IN FIVE YEARS FROM NOW.BUT I'M NO GOOD ON WEEK TO WEEK OR MONTH TO MONTH STOCK PRICES. FORTUNATELY, I DON'T HAVE TO BE.

Buffett on Commodities:

YOU JUST DON'T KNOW ABOUT COMMODITIES. They GET SHORT AND PEOPLE NEED THEM WE HAVE TO MAKE T-SHIRTS AND BRIEFS AND THAT SORT OF THING AND IF WILL ISN'T ENOUGH COTTON AROUND IN A GIVEN MONTH, WE BUY IT REGARDLESS OF PRICE. OIL IS THE SAME WAY,INELASTIC IN THE SHORT RUN. SO IF YOU GET ANY REAL INTERRUPTIONS IN BIG SUPPLIES OF OIL, AND I KNOW THERE'S EXCESS CAPACITY AROUND, BUT A BIG ENOUGH INTERRUPTION COULD CAUSE A BIG CHANGE IN PRICE.

Buffett on Optimism:

I WAS OPTIMISTIC WHEN I KNEW THINGS WERE GOING TO GO TO HELL. BUT THINGS DO -- WILL AMERICA GETS OFF THE TRACK FROM TIME TO TIME AND IT WAS PARTICULARLY SO IN THE FALL OF 2008. BUT YOU CAN'T STOP THIS COUNTRY. WE HAVE GONE THROUGH, I DON'T KNOW, 15 RECESSIONS, WORLD WARS, CIVIL WAR. YOU NAME IT. AND THERE IS A RESILIENCY TO THE AMERICAN SYSTEM. IT DOES WORK.

Buffett on US Economy:

IT'S KIND OF LIKE HAVING A BAD CROP IN FARMING. IF YOU HAVE GOOD LAND HERE IN THE MIDWEST, YOU'RE GOING TO HAVE A BAD CROP OCCASIONALLY YOU BUT YOU KNOW YOU'LL HAVE MOSTLY GOOD. AND WE HAVE GREAT SOIL FOR THAT COUNTRY METAPHORICALLY AND THIS WORKS OVER TIME.

Buffett on Fruit of the Loom:

QUICK : HEY GUYS BEFORE YOU GO REAL QUICKLY LET ME POINT OUT ONE OTHER THING I DIDN'T GET A CHANCE TO MENTION THIS EARLIER BUT I KNOW JOE AND CARL YOU HAVE BOTH GONE BACK AND FORTH BOXERS OR BRIEFS, BOXERS AND BRIEFS TODAY WARREN WORE A SPECIAL TIE WHICH SHOWS SOME OF HIS INTERESTS AS WELL

BUFFETT: THIS IS A FRUIT OF THE LOOM TIE AND I ACTUALLY HAVE THIS FOR AIRPLANES AND GEICO AND A BUNCH OF OTHERS BUT I THOUGHT IN HONOR OF YOU JOE I WOULD WEAR MY UNDERWEAR TIE TODAY. AT FRUIT OF THE LOOM YOU KNOW OUR MOTTO IS THAT WE COVER THE ASSES OF THE MASSES AND I THOUGHT OF YOU WHEN I PUT THIS TIE ON

KERNEN : THAT IS YOU KNOW WHAT WE COULD NOT SEE IT BUT WE JUST DID I LIKE THAT BUT CARL'S GOT THE RIGHT IDEA CARL YOU DON'T HAVE TO CHOOSE YOU ARE A BOXER COMBO BRIEF GUY

QUINTANILLA : YES

KERNEN: YES THEY MAKE SOMETHING

QUINTANILLA: AND YOU ARE A TIGHTY WHITIES GUY BECAUSE YOU EVEN HAVE THE UNDERWEAR FOR THE HANDS THAT JANE WELLS BOUGHT YOU

KERNEN: I HAVE THE UNDERWEAR FOR THE HANDS

BUFFETT: I WISH I HADN'T STARTED THIS

KERNEN: I KNOW I KNOW BUT YOU DID AND IT DOESN'T TAKE MUCH TO GET US TO TALK ABOUT THIS WARREN

BUFFETT: I CAN TELL THAT

Buffett on Economy Inching

ITS PROBABLY CLOSER TO INCHING INST BUSINESSES. AND IN RESIDENTIAL CONSTRUCTION, IT'S NOT INCHING. IT'S NOT GOING AT ALL. BUT YOU DO HAVE THIS UNEVEN SITUATION. WE HAVE A FEW BUSINESSES THAT ARE REALLY KIND OF MOVING AND WE HAVE A GREAT MANY BUSINESSES THAT ARE MOVING FORWARD AND THEN WE HAVE A FEW THAT ARE STUCK. BUT I THINK THAT'S TRUE OF THE ECONOMY.

Buffett on Employment:

BUSINESS AT BERKSHIRE WAS QUITE A BIT BETTER IN 2010 THAN 2009, BUT WE ONLY ADDED 3,000 JOBS. SO WE ADDED 1% TO JOBS NET. AND YET OUR BUSINESS REALLY IMPROVED QUITE A BIT MORE THAN THAT.AND THERE WERE REAL GAINS IN PRODUCTIVITY ACHIEVED ON THE DOWN SIDE. WHEN THEY REALLY HAD TO TIGHTEN THEIR BELTS, THEY FOUND OUT THEY COULD DO IT. AND I THINK THAT PERIOD IS LARGELY OVER.I THINK THE GAINS IN BUSINESS WILL BE MUCH MORE REFLECTED BY GAINS IN EMPLOYMENT GOING FROM THIS POINT FORWARD

Buffett on Unemployment Rate:

I WOULD GUESS THAT BY CLOSE TO THE ELECTION OF 2012, THAT UNEMPLOYMENT WOULD PROBABLY BE IN THE LOW 7s. HOW GOOD THAT WILL LOOK TO PEOPLE, I DON'T KNOW. BUT THAT WOULD BE MY GUESS FROM WHAT I SEE IN BUSINESS.

Buffett on Housing:

HOUSEHOLD FORMATIONS ARE RUNNING CONSIDERABLY HIGHER THAN HOUSING STARTS. SO THE EXCESS HOUSING SUPPLY IS BEING SOPPED UP, NOT AT AN INCREDIBLE RATE BUT at A SIGNIFICANT RATE. THAT'S A COUNTER BALANCE TO THE FACT THAT WE WERE BUILDING 2 MILLION HOUSING UNITS AND PEOPLE WERE PEOPLE TOO MANY HOUSES. AND THEY DON'T GO AWAY. SO THE ONLY WAY TO SOLVE THAT IS TO UNDER PRODUCE COMPARED TO HOUSEHOLD FORMATION.

Buffett on Monetary Policy:

WE'VE HAD MONETARY POLICY WITH ITS FOOT TO THE FLOOR FOR A COUPLE YEARS. AND WE NEEDED THAT TO GET OUT OF WHERE WE ARE. HOW LONG WE NEEDED IT FOR IS ANOTHER QUESTION. BUT THE IDEA OF OVERDOSING THE PATIENT TWO YEARS AGO WAS A TERRIFIC IDEA. THE Patient NEEDED EVERY BIT OF MORPHINE THEY CUD TAKE.

Buffett on Stimulus:

A STIMULUS BILL ISN'T A STIMULUS BECAUSE YOU STICK THE WORD STIMULUS ON IT. STIMULUS SPENDING MORE BY THE GOVERNMENT THAN IT'S TAKING IN. WE'RE TO GO DO THAT TO THE TUNE OF 10% OF GDP THIS YEAR. WE HAVE MASSIVE STIMULUS GOING ON IN THE UNITED STATES. STIMULUS LIKE YOU HAVEN'T SEEN SINCE WORLD WAR II. WE JUST DON'T CALL IT A STIMULUS BILL.

Buffett on Present Recovery:

THE GOVERNMENT DID ITS JOB THERE IN THE FALL OF 2008. THEY THREW IN EVERYTHING. AND THAT WAS HUGELY IMPORTANT IN GETTING ACROSS TO THE AMERICAN PEOPLE THAT THEY ARE IN THE GOING STAND IDLY BY WHILE THE WHOLE MACHINE CAME TO A STOP. BUT IN TERMS OF THE RECOVERY GOING ON NOW THAT RECOVERY IS GOING ON BECAUSE WE HAVE 70-SOME MANAGERS TRYING TO FIGURE OUT HOW TO DO MORE BUSINESS TOMORROW THAN YESTERDAY.

Buffett on Gold:

BASICALLY GOLD IS A WAY OF GOING LONG ON FEAR. AND IT'S BEEN A PRETTY GOOD WAY OF GOING LONG ON FEAR FROM TIME TO TIME, BUT YOU REALLY HAVE TO HOPE PEOPLE COME AFRAID IN A YEAR OR TWO YEARS THAN THEY ARE NOW. IF THEY BECOME MORE AFRAID, YOU MAKE MONEY, AND LESS AFRAID, YOU LOSE MONEY. BUT THE GOLD ITSELF DOESN'T PRODUCE ANYTHING.

Buffett on Bricks:

THIS COUNTRY USED 10 BILLION BRICK A YEAR FIVE YEARS AGO WHEN WE WERE BUILDING A COUPLE MILLION HOMES. WE'RE USING ABOUT 3 BILLION BRICK A YEAR. BUT IT ISN'T BECAUSE PEOPLE HAVE LOST THEIR INTEREST IN BRICK OR ITS UTILITY OR ANYTHING. IT'S JUST RESIDENTIAL CONSTRUCTION IS DOWN A LOT. THAT'S NOT GOING TO HAPPEN FOREVER. A BRICK PLANT IS GOING TO BE MORE COSTLY TO CONSTRUCT FIVE YEARS FROM NOW THAN NOW. IF WE'RE GETTING SOMETHING THAT'S STATE-OF-THE-ART, NOW IS THE TIME TO BUY IT.

Buffett on No More QE2:

I HAVE ENORMOUS RESPECT FOR BEN BERNANKE. HE KNOWS MORE THAN I DO ABOUT THE FED BY A FACTOR OF 100 TO 1. BUT IN THE END, I DON'T THINK WE NEED MORE OF THAT NOW.

Buffett on Aviation:

BUT WE'VE COMMITTED HUGE AMOUNTS IN THE ANTICIPATION OF DEMAND THAT OCCURS OVER THE NEXT TEN YEARS. NOW, YOU DON'T BUILD PLANES OVERNIGHT. YOU DON'T GET DEMAND FOR THEM OVERNIGHT. BUT THERE WILL BE AN INCREASE IN GENERAL AVIATION OVER THE NEXT DECADE.

Buffett on Railroads:

THE 800-AND-SOME MILES OF HIGH SPEED RAIL IN CALIFORNIA, THEY'VE TALKED ABOUT $43 BILLION FOR THAT. WE BOUGHT THE BURLINGTON WITH 23,000 MILES OF MAIN ROUTE RAILROAD AND TENS OF THOUSANDS IN SIDINGS AND ALL OF THAT. TUNNELS, BRIDGES. WE BOUGHT THE WHOLE THING FOR ABOUT 43 BILLION.AS YOU CAN SEE, IT'S PRETTY EXPENSIVE TO BUILD THAT STUFF.

Buffett on China:

THE UNITED STATES CANNOT GROW AT THE SAME RATE AS A CHINA CAN. BUT THEY START FROM A FAR, FAR LOWER BASE. WE OUGHT TO BE HAPPY THAT THEY'RE DOING WELL ITS NOT A ZERO SUM GAME. WE DO NOT WANT TO BE AN ISLAND OF PROSPERITY AMONG 7 BILLION PEOPLE AND HAVE 300 BILLION PEOPLE DOING VERY WELL HERE AND HAVE THE REST OF THE WORLD IN --YOU KNOW, IN SQUALOR.

Buffett on the Dollar:

THE DOLLAR WILL BECOME LESS IMPORTANT OVER TIME. AMERICA'S DOMINANCE OF THE WORLD ECONOMIC SYSTEM WILL DIMINISH. IT DOESN'T MEAN WE AREN'T GOING TO BE THE LEADING PLAYER 25 YEARS FROM NOW. WE WILL BE. BUT THIS OVERWHELMING DOMINANCE THAT WE'VE -- POST WORLD WAR II THAT WE'VE EXHIBITED THROUGHOUT THE WORLD, OTHER COUNTRIES HAVE CAUGHT ON TO SOME DEGREE. AND LIKE I SAY, WE SHOULD BE GLAD THEY'VE CAUGHT ON.

Buffett on Insider Information:

THERE'S BEEN A FAIR AMOUNT OF TRADING ON INSIDE INFORMATION, I THINK, IN WALL STREET. THERE'S MONEY IN IT, YOU KNOW. IT'S TEMPTING TO PEOPLE. IT COULD BE A SECRETARY IN A LAW FIRM. IT COULD BE A -- IT CAN BE SOMEBODY AT A PRINTER. I MEAN, THERE'S JUST -- YOU CAN'T MAKE A DEAL WITHOUT A CERTAIN NUMBER OF PEOPLE HEARING ABOUT IT. AT BERKSHIRE, I DON'T EVEN TELL THE DIRECTORS.?

Buffett on Job Creation:

I THINK WE'LL CREATE MORE JOBS THIS YEAR THAN LAST YEAR. THE UNEMPLOYMENT RATE BOUNCES AROUND IN A FUNNY WAY DEPENDING ON WHO DECLARES THEMSELVES IN THE LABOR FORCE. BUT I THINK WE WILL HAVE BETTER LUCK CREATING JOBS IN 2011 THAN 2010, JUST -- I JUST SEE BUSINESSES IMPROVING

Buffett on Regenerative Capitalism:

THE MOST IMPORTANT FACTOR BY FAR IS JUST THE -- THIS UNDERLYING REGENERATIVE CAPACITY OF CAPITALISM. IF YOU GO BACK A CENTURY OR SO, NOBODY HAD EVER HEARD OF MONETARY POLICY OR FISCAL POLICIES. WE HAD RECESSIONS AND THEY CURED THEM SELVES. AMERICANS WERE TRYING TO FIGURE OUT HOW TO DO THINGS BETTER THE NEXT DAY. CAPITALISM WORKS.

Buffett on Promises:

WE'VE MADE PROMISES FOR THE FUTURE THAT ARE REALLY KIND OF INCONSISTENT WITH THE REVENUE STREAMS WE'LL HAVE. THERE ARE 3 WAYS OUT OF IT: BREAKING THE PROMISES OR MODIFYING THEM, TAXING A WHOLE LOT MORE, OR INFLATING YOUR WAY OUT OF IT.

Buffett on Inflation:

INFLATION IS THE ULTIMATE TAX. I MEAN, IT TAXES PEOPLE WHO DON'T KNOW THEY'RE BEING TAXED. IT TAXES PEOPLE WHO BELIEVE IN THEIR GOVERNMENT. IT'S A PARTICULARLY -- YOU KNOW, I FIND IT A -- ALMOST A -- IT'S NOT THE WAY GOVERNMENT SHOULD BEHAVE. BUT THEY DO BEHAVE THAT WAY. IT'S THE EASIEST THING TO DO.

Buffett on Paper Money:

PAPER MONEY IS NOT A GOOD BET. AND THE MORE OF IT THAT YOU ISSUE -- I MEAN, THERE HAVE TO BE CONSEQUENCES TO ISSUING PAPER MONEY. THERE ARE CONSEQUENCES TO THE FED BUYING LOTS AND LOTS AND LOTS OF SECURITIES AND GIVING CREDITS TO -- TO THE BANKING SYSTEM IN RETURN. IF IT WAS ALL THAT EASY, YOU KNOW, WE'D BE DOING IT ALL THE TIME.

Buffett on Tenable:

I'D LIKE TO SEE SOMETHING SERIOUSLY ADOPTED THAT LEAVES US IN A SITUATION DOWN THE ROAD THAT IS TENABLE IN TERMS OF HAVING A -- A MONEY THAT WILL RETAIN ITS VALUE TO A VERY HIGH EXTENT.THE FACT THAT INFLATION NOW IS 1% OR 2% DOESN'T MEAN ANYTHING.

Buffett on Taxes on the Wealthy:

PEOPLE LIKE ME, WE ARE PAYING OUR LOWEST TAX RATES IN A LONG, LONG TIME. WELL, REALLY FOREVER. AND SO I THINK THERE COULD BE SOMETHING DONE ON THE REVENUE SIDE, BUT IT WOULD BE AT THE VERY TOP LEVELS. WHILE THESE PEOPLE WERE HAVING THEIR INCOMES ON AVERAGE GO FROM 45M PER YEAR TO 340M PER YEAR THEIR TAX RATE WAS GOING DOWN FROM 26 TO 16. BELIEVE ME, THAT IS NOT THE EXPERIENCE OF THE AVERAGE AMERICAN. THERE ARE THINGS THAT SHOULD BE DONE AND CAN BE DONE, AND THEY WILL NOT SLOW DOWN THE AMERICAN ECONOMY AT ALL.

Buffett on No New Promises:

THE ONE THING I THINK YOU DO, YOU QUIT MAKING NEW PROMISES. YOU MAY BE ABLE TO FULFILL THE ONES THAT YOU'VE GOT UP TO THIS POINT, BUT YOU SAY, LOOK, THIS IS GOING TO BUST US. I'M GOING TO MAKE NO MORE NEW PROMISES. AND, YOU KNOW, THAT'S A TOUGH THING FOR POLITICIANS TO SAY.

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