Billionaire Mr Warren Buffett remains confident that America's best days are ahead, but said that the nation likely will face higher unemployment and eventually inflation because of the economic crisis.

Mr Buffett said the nation's leaders need to emphasize a consistent message and they should back President Obama's efforts to repair the economy, because fear is dominating Americans' behavior.

He added that the economy has basically followed the worst-case scenario he envisioned six months ago.

Mr Buffett said that "It's fallen off a cliff. Not only has the economy slowed down a lot, but people have really changed their habits like I haven't seen."

He predicted that unemployment will climb a lot higher before the recession is done, but he also reiterated his optimistic long-term view: Everything will be all right. We do have the greatest economic machine that man has ever created.

Current efforts to help revive the economy are likely to produce inflation that could be worse than in the late 1970s, Buffett said. But, Buffett said that the government still needs to act.

Maintaining faith in the nation's banking system will be important to restoring the economy's health, Buffett added. He said President Obama needs to make it very clear that consumers won't lose money in banks even if more fail. Mr Buffet said that "If you don't trust where you have your money, the world stops.”

Mr Buffett stands by his overall advice that owning stocks over time will profit people greater than so-called safe investments. Overall, equities are going to do far better than U.S. government bonds at these prices.

(Sourced from Associated Press)