100 years – that’s how long Charlie Munger gives FIAT currencies to completely lose their value. Does he think cryptocurrencies will replace the traditional financial system?
Money on the verge of long-term collapse
The 98-year-old vice chairman of financial giant Berkshire Hathaway, Charlie Munger is convinced that FIAT currencies are headed for zero. Munger is the right hand of Warren Buffett – one of the richest people in the world. He knows the financial world very well and sees many of its flaws. He shared his observations and dramatic prediction about it in an interview for Yahoo! Finance.
Charlie Munger’s exact statement was as follows:
“The safe assumption for an investor is that the FIAT currency is heading to zero over the next 100 years.”
It can be assumed that Munger had the US dollar in mind here. The high inflation rates, which reached 7.5% and the mass printing of the dollar have a destructive effect on the American economy. This causes a snowball effect to other cryptocurrencies, as some of them are highly linked to the American dollar. Its weakening, in the absence of solid alternatives, can affect the purchasing power around the globe.
Can cryptocurrencies solve this problem?
The point made by Munger was eagerly picked up by Michael Saylor. He noted that Bitcoin solves this problem:
“Like many smart investors, he [Munger] understands the problem, but is unaware that we have developed a solution in the form of Bitcoin.”
These words are a sign of forbearance towards Munger’s attitude towards FIAT currencies, while also disapproving of his approach to cryptocurrencies. After all, as it turns out, the Berkshire Hathaway vice chairman blazes an aversion to the virtual asset market, once calling it a venereal disease. As he used to say:
“I just find it beneath contempt. Some people think it’s modern, and they welcome a currency that is only useful for extortion, kidnapping and tax evasion.”
Thus, he considers China’s move to ban the trading and mining of cryptocurrencies as very appropriate, and in his opinion, the United States should follow the same path.
