Money hasn't changed. Wealth has. I believe Buffett is not averse to what I'm going to describe. In the early 1800s, like in the time of Charles Dickens, people took clerk jobs where their pay changed very slowly, if at all, during their lifetime.
Beginning with the industrial revolution energy changed. Until that point, "horse-power" was constant for all of human existence. Steam engines allowed some people to be more productive than others. That created fast moving changes in wealth. Mankind has been on a tech tear since then. Buffett's main bet isn't on tech itself, which is too risky in picking, but humanities overall increase of wealth from tech. And he invests based on a simple fact that people can't help but keep paying for stuff that's bad for them--like Coke ;)
Anyway, interest on money can be looked at in many ways. One way is a risk-free fee for lending capital to a growing enterprise. You believe Apple will do well, but you don't want to take a chance its equity will go to zero? Buy Apple bonds. Think about it, whenever you buy a bond you're assuming 1) the business won't fail; and 2) it will make enough profit (growth) to pay the interest.
What happens when there is no new productivity? The people who own the current assets, real estate, factories, data centers, etc., stay in business, but there is no amount of extra money that will increase productivity. We're back to the 1800s where wealth has consolidated into those who own the primary resources (back then, property; today tech). With wealth consolidated it makes no sense to lend money at 10% because no one can grow a business from that debt and pay it off.
An irony, is that if you have wealth you can borrow against it at 0%, but if you have no wealth, your interest rate starts at 20%!
What we're seeing with zero rates is wealth consolidations. This isn't news. Piketty has written 1,000s of pages about it. How many people in your life have gone from rags to riches. I bet almost none.
To sum up. Banks can make money as vaults for wealth protection, where they charge money (which is why we have negative rates) or they can lend money for economic growth. There is no more growth, so Buffett is reducing his exposure to banks, which have become glorified custodians.
So what should people do? There's nothing they can do. Either they have wealth or they don't. It really doesn't matter if they buy stocks or keep it in cash. That's why the market hasn't crashed yet.
The real risk is those who have so little wealth they get violent. History will repeat. Like I said, Buffett sees this, but he's not the kind of guy to get that dark.
You aren't either thank God! :)
