Berkshire Hathaway Vice Chairman Charlie Munger, Warren Buffett’s right-hand man, has commented on the collapse of crypto exchange FTX, stating that “it is partly fraud and party delusion.” Noting that “the country did not need a currency that’s good for kidnappers,” he stressed: “I basically like the existence of the Fed … I hate bitcoin promoters.” He also said that Tesla’s success is a “minor miracle.”
Berkshire’s Charlie Munger on Bitcoin, FTX Collapse, the Fed, Tesla, and Elon Musk
Charlie Munger, Warren Buffett’s right-hand man and longtime business partner, has made fresh comments about bitcoin and the collapse of crypto exchange FTX.
“It pains me that in my own country, I see people that were once regarded as very reputable people helping these things exist,” the 98-year-old Berkshire Hathaway vice chairman said, adding:
This is a very very bad thing. The country did not need a currency that’s good for kidnappers and so on.
He noted that it depresses him that some people think “they gotta be on every deal that’s hot and they don’t care whether it’s child prostitution or bitcoin.”
He continued: “If it’s hot, they want to be on it. I think that’s totally crazy. Reputation is very helpful in financial life and to destroy your reputation by associating with scum balls and scum ball promotions, it’s a huge mistake.”
When asked about whether the companies that invested in FTX did any due diligence, Munger said:
You’re seeing a lot of delusion. It’s partly fraud and partly delusion. That’s a bad combination. I don’t like either fraud or delusion and the delusion maybe more extreme than the fraud.
“Nobody’s going to be in a new thing that every 12-year-old kid can be a billionaire or something,” he described, adding that he can just create a coin, call it a Munger coin, and start trading it. “It’s crazy, it’s demented.”
Munger also said:
I basically like the existence of the Fed. I think in a world of fiat currencies, we need wise central banks … So by and large, I like central bankers, and by and large I hate bitcoin promoters.
The Berkshire Hathaway vice chairman has never been a fan of bitcoin or crypto. He previously called bitcoin “rat poison” and “contrary to the interest of civilization.” He even compared the cryptocurrency to venereal disease. In July, he advised: “I just avoid it as if it were an open sewer, full of malicious organisms. I just totally avoid and recommended everybody else follow my example.” The Berkshire Hathaway executive believes that governments should ban bitcoin.
Munger also shared his opinion about Tesla and its CEO Elon Musk. He said:
I was certainly surprised that Tesla did as well as it did, but I do not equate Tesla with bitcoin.
“Tesla has made some real contributions to this civilization. Elon Musk has done some good things that other people couldn’t do … We haven’t had a successful new auto company in a long, long time, but what Tesla has done in the car business is a minor miracle,” he opined.