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June 19, 2009 – Page 6 of 87

Notable Recent Statements on Inflation

“In poker terms, the Treasury and the Fed have gone “all in.” Economic medicinethat was previously meted out by the cupful has recently been dispensed by thebarrel. These once-unthinkable dosages will almost certainly bring on unwelcomeaftereffects. Their precise nature is anyone’s guess, though one likely consequence isan onslaught of inflation.”

—Warren Buffett, letter to Berkshire Hathaway shareholders, February 27, 2009

“Our current chairman of the Federal Reserve, Ben Bernanke, is an ‘inflationist.’ When times were good, he supported an easy money policy. Even when the Fed raised rates, Bernanke took great pains to give the markets many warnings to insurethat the higher rates wouldn’t break up the credit party, i.e., bubble formation. Nowthat the cycle has turned, the Fed has promised to resort to ‘all means necessary’ tohead off the effects of the collapsed bubble. Rates have effectively been lowered to zero. The Fed is making loans collateralized by toxic waste and has now begun a policy called ‘quantitative easing’ – a fancy term for ‘printing money.’ The size of the Fed’s balance sheet is exploding and the currency is being debased. Combined with an aggressive fiscal policy, it is clear that the authorities are going ‘all in’ totry to mitigate the near-term effects of the economic collapse. Our guess is that if thechairman of the Fed is determined to debase the currency, he will succeed. Our instinct is that gold will do well either way: deflation will lead to further steps todebase the currency, while inflation speaks for itself.”

—David Einhorn, letter to Greenlight Capital investors, January 20, 2009

“I am 100 percent sure that the U.S. will go into hyperinflation… The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflationwill start to accelerate.”

—Marc Faber, interview with Bloomberg Television, May 27, 2009

“My main worry right now is the possibility of inflation due to the actions of the government. Inflation is part of how the world is trying to get out from under theexcess level of leverage that exists. Not to contradict another gentleman who is smarter than I am, Milton Friedman, but inflation is not just a monetary phenomenon in my opinion. There are psychological aspects to it as well. If inflationary psychology takes hold I don’t see how you could keep long term interest rates anywhere near where they are today. If long rates go up then the price of everyasset goes down. While I think intellectual capital with repricing ability is the best way to mitigate that risk it will not be fun to go through that process if inflation heatsup too much. There is a ‘tipping point’ as Malcolm Gladwell would say where a littleinflation is helpful, but too much is absolutely destructive. And I mean destructiveway beyond just the stock market but in terms of social fabric issues. I am constantlythinking about this dimension and trying to be a good steward of the finances at Markel in the context of this risk.”

—Tom Gayner, interview with

The Manual of Ideas,

April 6, 2009

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June 19, 2009 – Page 7 of 87

“...most of Liberty’s liabilities are very long term and fixed, and those represent a pretty darned good bet on inflation. Our cash is basically all very liquid, very short term, very safe. We’re sitting with cash looking for opportunity and with liabilitieslooking to be devalued by government policy. That’s our philosophical view of howwe sit right at the moment.”

—John Malone, interview with

Denver Business Journal,

April 27, 2009

“In the longer term, we have to wonder about the effect on the world of a glut of newly printed dollars, sterling and euros. The reason owning printing presses makesrepayment easy is that it lets a nation cheapen its currency. But one would think that more units of currency per unit of GDP means a debasement of the currency, and thus reduced purchasing power (read: higher inflation).”

—Howard Marks, memo to Oaktree clients

October 15, 2008

“I’m amazed at the amount of money the government is throwing at this thing. Youdon’t even react anymore unless somebody’s talking about $1 trillion. I genuinelyadmire the administration’s courage in doing what it’s doing, but not the wisdom of it. I look at the TALF (Term Asset-Backed Securities Loan Facility) program, for example, and it’s almost a bribe to get people to put on more leverage… I ask anyone to give me an example of an economy beefed up by huge amounts of quantitative easing that did not inflate tremendously when or if the economyimproved. I think what we’re doing now will either fail, or it will result inunbelievably high inflation – and tragically, maybe both. That would mean adepression and explosive inflation, which is frightening.”

—Julian Robertson, interview with

Value Investor Insight,

May 31, 2009

“…there is inflation now in many things. There’s temporary deflation in rawmaterial prices and in some property. But throughout history, whenever you’ve had gigantic printing of money and spending of borrowed money, it has always led tohigher prices. Unless something is dramatic, it’s going to happen again. When? I don’t know. It’s already happening in some things. I don’t know if you’ve bought any sugar recently or some other things, prices are up and that will continue and it will get worse.”

—Jim Rogers, interview with

DailyMarkets.com,

January 15, 2009

We will see inflation in assets we need (commodities) and deflation in assets we own.

—Peter Thiel, paraphrased from Ira Sohn conference notes, May 27, 2009

“We’ve had this massive fiscal stimulus, massive monetary stimulus, and it’s hard to see how that doesn’t translate into pretty substantial inflation, or at least pretty substantial risk of inflation.”

—David Swensen, interview with

WealthTrack,

May 22, 2009