Warren Buffett warns inflation is on the way

Warren Buffett told shareholders at Berkshire Hathaway's annual meeting that while the government's response to the financial crisis has been appropriate, it will likely lead to some pretty serious inflation.

"I haven't had my taxes raised," said Buffett. "My guess is the ultimate price will be paid by a shrinkage of the value of the dollar."

Inflation will have the effect of penalizing people who have had the gall to save money, but will also serve as a bailout to people who have accumulated fixed-rate debt: As your income rises your debt payments won't, and you'll be paying off loans with money that is worth less than the cash you borrowed.