Warren Buffett says he’s still worried about inflation, and says, contrary to what many believe, inflation can occur even if the economy is operating with significant excess capacity.

“I don’t think there could be a better Fed chairman [than Ben Bernanke], but I still worry about inflation,” Buffett tells CNBC. “He didn’t talk about this the other day, but there’s a lot of people who take the approach that because there’s excess capacity in the United States industry that you can’t have inflation because it won’t get tight.  But I can tell you that in the businesses we’re in [at Berkshire Hathaway], plenty of them have a lot of excess capacity still. But if we get enough commodity price increases, we raise our prices even though business is not good.”

Buffett, who has expressed concern over inflation for a while now, says one example is the carpet industry, where profits have been poor.