Transcript: https://www.rev.com/blog/transcript...shire-hathaway-annual-meeting-transcript-2021 Webcast: (Inflation comments at 04:11:30) https://finance.yahoo.com/brklivestream Excerpt: Becky: (04:40:03) I will ask this question from Chris Freed from Philadelphia, and whoever wants to take this onstage, from raw material purchases by Berkshire subsidiaries, are you seeing signs of inflation beginning to increase? Warren Buffett: (04:40:03) Let me answer that and Greg can give me. We’re seeing very substantial inflation. It’s very interesting. We’re raising prices. People are raising prices to us, and it’s being accepted. Take home building. We’ve got nine home builders in addition to our manufactured housing operation, which is the largest in the country. So we really do a lot of housing. The costs are just up, up, up. Steel costs, just every day they’re they’re going up. And there hasn’t yet been because the wage stuff follows. The UAW writes a three-year contract, we got a three-year contract, but if you’re buying steel at General motors or someplace, you’re paying more every day. So it’s an economy really, it’s red hot. And we weren’t expecting it. Warren Buffett: (04:40:03) All our companies, they thought when they were allowed to go back to work for various operations, we closed the furniture stores. I mentioned, they were closed for six weeks or so on average, and they didn’t know what was going to happen when they opened up. They can’t stop people from buying things and we can’t deliver them. And they said, “Well, that’s okay, because nobody else can deliver them either and we’ll wait for three months or something.” So the backlog grows. And then we thought it would end when the $600 payments ended, I think, around August of last year. It just kept going and it keeps going and it keeps going, and it keeps going. I get the figures every week, I call or calls me, and we go over day by day what happened at three different stores in Chicago and Kansas City and Dallas. And it just won’t stop. People have money in their pocket and they pay the higher prices. When carpet prices go up in a month or two, they announced a price increase for April, our costs are going up. Supply chains all screwed up for all kinds of people, but it’s almost a buying frenzy, except certain areas you can’t buy it. You really can’t buy international air travel. Warren Buffett: (04:40:03) So the money is being diverted from a piece of the economy into the rest. And everybody’s got more cash in their pocket, except for meanwhile, it’s a terrible situation for a percentage of the people. This suit, I haven’t worn a suit for a year practically and that means that the dry cleaner just went out of business. I mean, nobody’s bringing in suits to get dry cleaned, and nobody’s bringing in white shirts. A place where my wife goes… The small business person, if you didn’t have takeout and delivery services for restaurants, you got killed. On the other hand, if you’ve got take out facilities, same source sales, Dairy Queen are up a whole lot and they adapted. But it is not a price sensitive economy right now in the least. And I don’t know exactly how one shows up in different price indices, but there’s more inflation going on, quite a bit more inflation going on that people would have anticipated just six months ago or thereabouts. Charlie Munger: (04:40:03) Yeah. And there’s one very intelligent man who thinks it’s dangerous and that’s just the start. Warren Buffett: (04:40:03) Greg, you probably are in a good position to comment. Greg Abel: (04:40:03) Yeah. Warren, I think you touched on it, when we look at steel prices, timber prices, any petroleum input, fundamentally there’s pressure on those raw materials. I do think something you’ve touched on, Warren, and it goes really back to the raw materials. There’s a scarcity of product right now of certain raw materials. It’s impacting price and the ability to deliver the end product. But that scarcity factor is also real out there right now is as our businesses address that challenge. And it may be some of that’s contributed or arisen from the storm we previously discussed in Texas. When you take down that many petrochemical plants in one state that the rest of the country is very dependent upon it, we’re seeing it flow through, both on price, but overall in scarcity of product, which obviously go together. But there’s challenges, that’s for sure.