In today’s Money Morning…easy money or productive money?…a hypocritical viewpoint…China is no role model…and much more…
Earlier this week, Charlie Munger — of Berkshire Hathaway fame — let loose on crypto once more.
One shareholder seemed to really get under his skin when asking if Munger had ‘missed something’ by ignoring crypto markets. It was a statement that was met with the following response:
‘I’m proud of the fact that I avoided it. It’s like some venereal disease or something…
‘I just regard it as beneath contempt. Some people think it’s modernity and they welcome a currency that’s useful in extortions and kidnappings and so on and so on, tax evasions.’
The same old excuses we’ve seen or heard a thousand times.
But that’s nothing new when it comes to Munger. His vocal hatred for crypto is pretty well known at this point. It is getting to the point that I feel a bit sad for even having to talk about his jaded outlook.
Having said that, though, it is worth debunking his out-of-touch claims.
Because no matter how out of touch he may be, Munger’s influence needs correcting. Not just because we believe he’s wrong about crypto, but because, to use his own words, his ideas are like a disease too…
Easy money or productive money?
Beyond the vitriol, what really stood out about Munger’s comments this time was one remark in particular. A jab that he aimed at the people ‘running’ crypto markets.
As he states, crypto is being pushed by ‘people who want to get rich quick for doing very little for civilization.’
Now, I’m not going to even bother refuting his first claim.
The idea that people want to get rich quick is hardly exclusive to crypto. After all, most average investors are in markets to make money. And the faster they can, the better.
Munger’s second claim, though, that crypto is doing very little for civilisation, is the real knee-slapper.
I have to assume he thinks all his investing over the years has been for the betterment of society. It’s a very egotistical and narcissistic view to have, even for someone as successful as he is.
A hypocritical viewpoint
You can’t tell me Munger’s investments in businesses like Coca-Cola are benefiting civilisation. It’s just a popular fizzy drink that rots people’s teeth. And if he wants to argue that they’ve created jobs for the economy, well so does the crypto sector…
Worse still, how about we consider Munger’s investments in Wells Fargo and Bank of America. The former of which is no longer even on Berkshire’s books because they sold it late last year. Despite that, though, they held onto these two banks that almost ruined the global economy in 2008.
And while both these banks may have paid back their bailout sums — US$25 billion and US$15 billion respectively — everyday people suffered the most. There was no bailout for the pensioners who lost their retirement funds or the families who lost their homes.
Which is why, in the wake of this financial rort by the elite (like Munger), Bitcoin [BTC] was created.
It was created as an asset that would be free from the pervasive and destructive influence of the rich — a store of value and potential currency that would be equal for all who hold it.
Seems to me like that would benefit civilisation a whole lot. But because Munger’s idea of civilisation seems to only revolve around himself, that doesn’t fit neatly into his perspective.
China is no role model
Perhaps the most disturbing thing to come from Munger’s latest tirade though is his praise for China.
He stated that he thinks the ‘communist Chinese were wiser than we were’. This was in reference to Beijing’s decision to ban crypto.
What Munger either chooses to ignore or doesn’t realise is that China banned crypto because they put in place their own version of it. The digital yuan is the CCP’s answer to bitcoin…
The problem is that the digital yuan’s principles are the direct opposite of bitcoin. It’s likely to become just the latest tool of control to influence and strong-arm the local population.
After all, the whole point of bitcoin and blockchain technology is decentralisation. This is a point that we will continue to harp on about so that people don’t fall for these impostor projects.
The fact that Munger is praising China for this is genuinely alarming.
Again, whether he is ignorant or complicit is irrelevant. No freethinking individual should put blind trust in a government’s digital currency. Otherwise, the consequences could be dire.
As for critics of crypto like Munger, the best thing you can do is ignore them.
Not because the crypto sector is beyond criticism — there are certainly a lot of issues still to address. But because people like Charlie Munger are arguing in bad faith.
They don’t get crypto, and they likely never will.
Editor, Money Morning
Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks. For information on how to subscribe and see what Ryan’s telling subscribers right now, click here.