Charlie Munger, the vice-chairman of Berkshire Hathaway, has predicted that fiat currency will go to zero in the next century. While the 98-year old investor seems to have little faith in the performance of fiat currency in the long term, he is still sceptical about the crypto market.
The crypto community was quick to react to Munger’s remarks, with the CEO of MicroStrategy, Michael Saylor, saying that a depreciating fiat currency made a case for the use of Bitcoin.
Charles Munger has no faith in fiat currency
Munger was giving the remarks during an interview with Yahoo Finance. “The safe assumption for an investor is that over the next hundred years, the (fiat) currency is going to zero,” Munger said.
Saylor retweeted this interview, saying that the solution to a depreciating fiat is Bitcoin. “Like many intelligent investors, he understands the problem but is unaware that we have engineered a solution in the form of Bitcoin,” Saylor argued.
The level of inflation in the US has grown significantly over the years. Currently, the level of inflation sits at a forty-year high of 7.5%. Additionally, the cost of living continues to increase, and the US dollar no longer holds the same value that it did a year ago or the years before that. The rising inflation has been attributed to the increased supply of the USD due to the central bank printing money.
Munger is not a fan of crypto
While Munger sees a major dilemma in the dependence on fiat currency, he is still not a fan of cryptocurrencies. According to Munger, cryptocurrencies are the currency of choice in illegal activities such as extortions, kidnappings and tax evasion.
Munger also opined that if he had the authority, he would ban the use of cryptocurrencies. He noted that allowing crypto trading was a “huge mistake” by the US.
“I wish it had been banned immediately. I admire the Chinese for banning it; I think they were right, and we [the United States] were wrong to allow it,” he said. Munger is also opposed to day trading in the securities market, saying that it corrupts the purpose of the stock market, which is to provide capital to private entities.
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