The mainstream finance mogul pauses to express his thoughts about Bitcoin and Tesla.
Charlie Munger is Warren Buffett’s longtime business partner and at the ripe old age of 98 is the Vice Chairman of the Berkshire Hathaway Holding Company.
Historically the manager and investor has never been very friendly with digital currencies, especially Bitcoin, repeatedly telling investors to abandon the investment.
The recent failure of FTX has certainly not softened the businessman’s positions, which in fact have hardened behind the statements:
“It’s a fraud and a party delusion. The country didn’t need a currency that was good for the kidnappers. Basically I like the existence of the Fed… I hate bitcoin promoters.”
The tycoon also lingered on about Tesla, calling the company’s success downright miraculous.
Behind the success of the American company remains the fact that it has brought value to America and the industry.
Charlie Munger speaks out: Bitcoin is evil, while Tesla a miracle
Historically Charlie Munger, unlike Warren Buffett who has been more swinging in opinions, has always taken a very critical stance on Bitcoin and cryptocurrencies in general.
To quote his latest statement following this interview, he had been unequivocal on the subject, going so far as to state:
“I avoid it like it’s an open sewer full of harmful organisms. I totally avoid and recommend that everyone else follow my example.”
With statements like that coming from such an influential investor there should have been a stampede to sell, with greater magnitude than what happened with FTX, and instead BTC remains firmly at the helm of crypto and paradoxically precisely because of its solid foundation it is here to stay and investors appreciate it regardless of various failures of some platforms.
In this interview, the tycoon returned to the subject by drawing parallels with the roaring years that saw him at the forefront of finance stating:
“It pains me that in my country I see people who were once considered very respectable people helping these things to exist.”
Letting out a vein of bitterness and disappointment toward some of his colleagues who have been “captivated” by Bitcoin:
“This is a very very bad thing. The country didn’t need a currency that was good for kidnappers and so on. It depresses me that some people think they have to participate in every deal that’s hot and they don’t care if it’s child prostitution or Bitcoin. If it’s hot, they want to be there. I think it’s totally insane. Reputation is very useful in financial life and destroying your reputation by joining scumballs and scumball promotions is a huge mistake.”
When the subject of FTX came up, regarding the level of controls and security of the exchange, Charlie Munger did not use leniency by evoking amazement that so many have put money in the hands of this company.
“It’s part fraud and part delusion. It’s a very bad combination. I don’t like either fraud or delusion and delusion is perhaps more extreme than fraud. Nobody will be in a new thing that any 12-year-old can be a billionaire or something.”
The fact that a company can, with the help of algorithms, programming and due controls, create a currency from scratch does not sit well with Munger and he calls this possibility insane.
The vice chairman of Berkshire Hathaway categorically rejects this practice and emphasizes the role of the Fed and regulators in addition to the role of central bankers.
On the topic he expressed himself in the following way:
“Basically I like the existence of the Fed. I think in a world of fiat currencies, we need wise central banks… So in general, I like central bankers and in general I hate bitcoin promoters.”
The EV company pleases the investor who sees it as a more unique than rare event that has breathed new life into the automotive industry and brought the world’s attention back to an American automaker, just as Henry Ford did in his time.
The work done by Elon Musk is hugely important to the industry because it brings new technology as well as jobs and elevates the potential of the United States of America, leading the way in technology on the planet.
Munger said he was surprised by Tesla’s performance in both product realization and growth.
The company according to the tycoon is in no way comparable or relatable to Bitcoin as it is based on the success that comes from unprecedented study and work, in essence from value.
“Tesla has made real contributions to this civilization. Elon Musk did good things that other people couldn’t… We haven’t had a successful new car company in a long, long time, but what Tesla has done in the automotive industry is a small miracle.”
Tesla has brought back that American muscle car dream with a new key and a new propulsion system.
Cars are still whizzing down Route 66 rather than through the crowded streets of New York City, but now they are doing it electrically, and this trend is destined not to stop, but rather grow.
Not only has Elon Musk been able to improve on the performance achieved by gasoline-powered cars, but he has reinvented green mobility by focusing on zero impact and affordable mobility with ADAS systems and autonomous driving and safety braking features in case of driver distraction.