Group 1 - Berkshire Hathaway holds $340 billion in cash and cash equivalents, indicating a belief that corporations are currently overvalued [2] - The cash position of Berkshire Hathaway challenges the neo-Austrian School's view that banks multiply money into worthlessness [3][9] - The concept of the "money multiplier" is critiqued, asserting that money does not multiply and that the existence of savings contradicts this theory [6][9] Group 2 - The article argues that if the neo-Austrian theory were valid, Berkshire Hathaway would not have such a significant cash reserve [8][9] - The funds held by Berkshire are in the hands of profit-motivated individuals, countering the notion that banks devalue money through lending [8] - The critique of neo-Austrian economics emphasizes that the act of lending does not equate to devaluation, as saving remains a viable action [5][7]
Warren Buffett's Bearishness Tramples On The ‘Money Multiplier' Myth