BERAL, INC.
Andrew Racz
Director of Research
300 East 54 Street, Suite 26C
New York, NY 10022
Phone: (212) 319-6949
Fax: (212) 753-1944
E-mail: mlikar@aol.com

WARREN BUFFETT RECEIVES A CALL FROM FRANKLIN ROOSEVELT

Are you calling me from heaven, Mr. President?

Oh, no... Washington, DC. The Oval Office.

I am back!

Warren, the problem is borrowing money ensecured!

...and then the dancing stops!

Warren Buffett received a call early morning in September, 2001.

Mr. Buffett has made a speech a few weeks before that the American economic crisis may last for eight years, certainly the stock market crisis. In August 2001, 1,100,000 became unemployed, but there was still an air of complacency among most of the people. We received $600 per family, a tax rebate from the government. There was the rebate itself, its size, the timing has begun to point out that there is something seriously wrong in the United States.

The telephone call came at a totally unexpected moment. Warren always slept with the telephone next to his bed and, being a light sleeper, he picked it up. "Warren Buffett," he said. He first didn't want to understand, but the voice was very firm like in the movies. "Warren, this is Franklin Roosevelt." Warren, first didn't know how to adjust to the early morning reality, but then he said, "Mr. President, are you calling me from heaven?"

"Oh, no," boomed Roosevelt, "here I am in Washington, D. C. at the oval office. I am back." It was Somewhat of puzzlement so he tried to remain quiet and listen to Roosevelt. "Actually," my son, it is more enjoyable than in the past. You have air conditioning, you have calculators, computers, international telephone which I can dial, three-way telephone contact with anybody in the world. Quite frankly, it's much easier to run the world in 2001 than the United States in 1933."

Warren said, "Are you going to run the whole world, Mr. President?"

He said, "Well, it looks like it because everything is international and somebody has to take the leadership. By jolly, nobody has taken the leadership now for the last fifty years. Look at the mess the world is in."

But still adjusting to the unusual tone, Buffett said "How did you get back to the oval Office, Mr. President?"

He said, "Well, it was an extraordinary step. Congress held an extraordinary session and they called up God, and God released me for eight years to clean up the mess."

Warren couldn't agree with him more. He said, "Well, what would be your policy, Mr. President?"

"Well," he said, "it was frankly easier in my time. All I had to say in 1933 was we have nothing to Fear but Fear itself. We were a small country of 140 million people. ...and now, 70 years later, look at what we have. The WT, IMF, NAFTA, the European Common Market, everything is interrelated. If anything happens in any part of the world, there is a flight from the dollar which hits us back in the United States. We didn't have these problem. Warren, my time was a linear feature. I simply told Harry Hopkins to create four or five million new jobs. I established fifteen agencies in the first hundred days, and off we go. In 1936 -- you people don't remember - but in 1936 after my first term, we have manufactured as many automobiles as at the beginning of the Depression. Now, quite frankly, I don't see any way that in four years we can make such progress. So my son, Warren, you are right. Four years is not enough, maybe eight. This is much more complex.

Warren was getting deeper. "What would be your leading policy, international policy?"

Roosevelt was quiet for a while. He was after all a politician and he said, "Let's leave that issue a little bit out of our discussions. The problem I see is as follows. In 1933, we had a nation of 140 million people, and there was maximum unemployment, 25%. Another 25% would have really .been a revolution, but we managed to stop the decline. Now, in the whole world today you have unemployment of at least a hundred million people. It can easily sink into 200, 300 million and people would suffer and it would solve nothing. And the problems could multiply even greater. I cannot bring in programs on a worldwide basis to build swimming pools, airports, roads. It's almost impossible. And you see the problem of money.

"If you. recall, I brought in the Social Security system and 15% of our people got protected. Today, everybody is protected, everybody has this 401(k) which frankly, personally, I didn't have and even the Roosevelt Family could have used it. And most people's 401(k) has declined 50% in the year 2000. A 50% decline in assets, what happens? People sell their homes, prices decline. We need extraordinary steps with, extraordinary people."

"You know, Mr. President," Warren Buffett said, "we never met."

"No," said Roosevelt, "I looked it up on the computer. You were born seventy years ago so you were just born when I was first inaugurated. Do you know if I am in this job for eight years, I will be inaugurated six times? Only Joseph Stalin ruled 30 years. And you know, every day to sit in the oval office is an entirely major difference between 1933 and, the year 2000. Nobody cares whether I am on crutches, whether I am in a wheelchair. People don't care, they only care about money, and maybe that's better."

Buffett tried to interrupt. He said, "You are right. I was twelve or thirteen years old when you were fighting for the world on Omaha Beach. I did visit Omaha Beach, and I gave a major donation. In fact, every year I make a big payment to the Omaha Beach Fund, I never forget, Mr. President, that you led the whole world to freedom. Omaha Beach is something very dear to my heart. But coming back, Mr. President, what is the major problem in the world in your view today?"

Roosevelt finally stopped being a politician and got down to facts. "My son, Warren, the problem is High Living. The problem is borrowing money, spending big, and when the dancing stops all the tragedies begin to happen. And we don't know how to get off the dance floor.

"Now, I want to tell you what my policy is. I want to induce you to the U.S. Army. After all, I am Commander in Chief and I need people like you around me. I cannot be a politician in running this nation - I have to be like a real Commander in Chief. We need a number of people from all over the world who have great financial brains. You remember Joe Kennedy? I wasn't really fair to him. The man was a genius. He always knew how to make money and he never got into debt. I want Joe Kennedy back. Then you have this fellow Ruben from Goldman Sachs. Chairman McKensey Martin of the Federal Reserve in the early 30's. Don't forget Professor Erhardt from Germany, Helmut Schmidt. We need these people. I can get people from anywhere in the world wherever they are.

Warren started to smile a bit when he said, "But Mr. President, most of those people are dead."

He said, "Oh, no, that doesn't make any difference. It doesn't make any goddamn difference. If I want them, I will have them, because I am now the President of the United States who is also the Accredited president of the World. If I want them, I will get them. Your job is to line everybody up."

Buffett was taking notes, This was probably the most important unusual session he had ever had. He was not really used to taking orders, but now he enjoyed it. He was forming, after all, the world's monetary cabinet in the 21st century.

"And Mr. President, what would be your slogan? In 1933, you stated 'The only fear we have is fear itself.' In 2001, I say, my son, in 2001 I have to tell the world to 'Live Decently.' The only fear we have to fear is high living and extravagance. We have to wipe out forever the concept that we can spend every penny, we can borrow every penny and live safely in this universe. Our enemy is not Russia, our enemy is not Germany, not Japan,
Our enemy is unsecured credit. The enemy is within us. "

Another silence followed. This was after all a historical statement of unusual proportion. And Roosevelt then continued, "When it comes to politicians, yes, I need politicians. But I need people who can carry this message. I have to admit that when it comes to salesmanship, nobody has ever been better in my eyes than Bill Clinton and John F. Kennedy.

"Maybe I am glad that the messages of the past-war decades did fine! I wouldn't be back. And let me tell you, after three days I enjoy being back in the White House. After all, I always believed that if there is one president of the world, it will be me."

Andrew Racz

Disclaimer

Information contained herein is based on data obtained from recognized statistical services, issuers reports or communications or other sources believed to be reliable. However, such information has not been verified by us and we do not make any representation to its accuracy or completeness. Any statement non-factual in nature constitutes only current opinions which are subject to change. BERAL INC. or their officers, directors, analysts or employees may have positions in the securities or commodities referred to herein, and may as principal or agent buy and sell such securities or commodities. An employee, analyst, officer or a director of BERAL INC. may serve as a director for companies mentioned in this report. Neither the information nor any comment expressed shall constitute an offer to sell or a solicitation of an offer to buy any securities or commodities mentioned herein. There may be instances when fundamental, technical and competitive opinions may not be in concert. This firm may from time to time perform investment banking or other services for or which investment banking or other businesses from any company mentioned in this report.

 

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Andrew Racz. 300 East 54 Street, Suite 26C, New York, NY 10022
Phone: (212) 319-6949 Fax: (212) 753-1944. E-mail: mlikar@aol.com

Copyright © 2011 Andrew Racz. All Rights Reserved.

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