This Is Bigger than Money…and Munger

By ,

In today’s Money Morning…truck you, Trudeau!…one step closer to authoritarianism…why bitcoin matters…and more…

Warren Buffett’s cantankerous offsider, Charlie Munger, was out in force last week.

Amongst other things, he said:

Over the next 100 years currency is going to zero.’

Bitcoin is a venereal disease.’

Civilized people don’t buy gold.’

The 98-year-old was certainly pulling no punches!

But there’s a very obvious conflict in his thinking here.

He’s acknowledging that fiat money is going to be worthless over time, and yet he simply ‘name-calls’ hard money alternatives like gold and Bitcoin [BTC].

What does he think comes next then?

I can’t really see the point he was trying to make…

Then again, I’ve happily ignored Munger for most of my investing life.

While acknowledging his obvious investment success in the past, it’s worth pointing out that both he and the Oracle of Omaha, Warren Buffett, have a less impressive track record when it comes to game-changing technology.

As this chart shows, Berkshire Hathaway has significantly underperformed the simple Nasdaq Technology Index since the GFC in 2008:


Fat Tail Investment Research

Source: Trading View

[Click to open in a new window]

And if I showed you a chart of the bitcoin price over this time, it would be off the page!

My colleague Ryan Clarkson-Ledward completely dismantled Munger’s talking points in Friday’s note. Especially from the perspective of a younger generation who feel increasingly locked out of financial opportunity.

But my favourite reply came from Elon Musk.

He tweeted:

I was at a lunch with Munger in 2009 where he told the whole table all the ways Tesla would fail.

Made me quite sad, but I told him I agreed with all those reasons & that we would probably die, but it was worth trying anyway.

What a pleasant bloke he sounds!

But Musk had the last laugh.

We all know how successful Tesla has been since then and how Musk has radically reshaped the entire automotive industry.

Anyway, I suppose my point is that no one — no matter how successful or ‘qualified’ they may seem — knows the future.

The future is unknowable by definition.

And in our era of rapid change, a lot of people are limited by their experience, cynicism, or lack of imagination.

That doesn’t mean they won’t be right from time to time. But it does mean they won’t adequately judge the risks of being wrong either.

And when it comes to bitcoin, I think Munger’s dead wrong.

Not only in his investment thesis but in his characterisation of bitcoin as ‘bad’.

As I want to show now, there’s probably no other asset class better aligned to American and Western ideals of freedom than bitcoin currently.

Let me explain…

Truck you, Trudeau!

I wrote this last week for subscribers of my cryptocurrency trading service. But I think it’s important to share with a wider audience today.

You’ve probably heard about the protesting Canadian truckers by now.

Basically, a large convoy of trucks has paralysed the Canadian capital, Ottawa, causing gridlock in a key route for cross-border trade with the US for about two weeks.

They call themselves the ‘Freedom Convoy’ and were originally protesting mandatory COVID vaccines to cross into the US.

Though now, the protest has expanded into a few different areas with a common theme being the power of big government.

At the start it was pretty easy for the mainstream to dismiss the colourful protestors as ‘crazies’ or ‘fringe dwellers’.

That is, until this week…

One step closer to authoritarianism

In a huge misstep, Canadian Prime Minister, Justin Trudeau, validated their concerns to the world.

You see, a frustrated Trudeau chose the nuclear option and invoked the Emergencies Act in an effort to threaten the truckers into submission.

This move gives authorities extensive powers to punish protestors and it’s only the second time they’ve been invoked in peacetime.

His Deputy PM told an astonished world:

…as of today, a bank or other financial service provider will be able to immediately freeze or suspend an account without a court order.

Let that sink in for a while…

This is basically a government threatening to steal money off its own citizens for the act of protesting.

Whether you agree with the protest or not doesn’t matter.

As the famous French philosopher Voltaire remarked:

I disapprove of what you say, but I will defend to the death your right to say it.

Protests are a legitimate source of free speech in democracies, whether or not you agree with what’s said.

It’s a principle that must be defended. And as I said before, it basically proved the truckers’ point!

As this tweet points out:


Fat Tail Investment Research

Source: Twitter

[Click to open in a new window]

This move is highlighting the whole point of bitcoin too…

Why bitcoin matters

Sadly, the Canadian government has decided to weaponise their financial system to target those who disagree with it.

They already froze CA$4.7 million raised for the truckers in a GoFundMe campaign.

This move resulted in supporters using bitcoin donations to funnel funds to protestors instead.

The Trudeau government then responded by broadening anti-money laundering and terrorist financing laws to include crowdfunding platforms and cryptocurrencies.

Wow, what an escalation!

And while they can freeze funds in bank accounts, they have absolutely no power over the Bitcoin network.

The donated funds will make their way to affected truckers, whether they like it or not.

As a bitcoin advocate, you couldn’t ask for better advertising.

I mean, for years, I’ve seen people’s eyes glaze over when I talk about the concept of censorship-resistant money.

It’s a problem people think only affects tinpot dictatorships in Africa or South America.

But here is a G20 country, a so-called bastion of Western values, doing exactly what we’ve always feared.

They’ve used control over money and the financial network as a means to threaten political opponents.

This is a big step down the road of authoritarian control. And a precursor of things to come with so-called Central Bank Digital Currencies (CBDCs).

Another old saying — ‘Power corrupts, and absolute power corrupts absolutely’ — has never been truer than when it comes to money.

That’s what bitcoin and the cryptocurrency movement is all about.

It takes that power away from corruptible people and gifts it to a decentralised system no one controls.

After this week, the value and fundamental purpose of this ideal have never been clearer, no matter who you are or where you live.

Good investing,

Ryan Dinse Signature

Ryan Dinse,
Editor, Money Morning

Ryan is also editor of New Money Investor, a monthly advisory aimed at helping investors take an early-mover advantage as decentralised finance and digital money take over the world. For information on how to subscribe and see what Ryan’s telling his subscribers right now, click here.

About Ryan Dinse

Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately…

The Social Media Crash Isn’t a Warning for Tech — It’s an Opportunity

In today’s Money Morning…adapt or die…the top dog…Web 3.0 is coming…and more…

Securing Lithium Supply Is Still a Priority as Markets Jitter

In today’s Money Morning…transport is going through a revolution…lithium is key to the energy transition…lithium producers are still enjoying a boost from high prices…and more…

The Future of Growth Stocks: Is It Bleak?

In today’s Money Morning…growth funds take a hit…a lost decade for stocks?…distinguishing value from price…and much more…

Markets Eye 27 July Nervously

In today’s Money Morning…credit markets not panicking…yet…what happens on 27 July?…this is the game you have to play…and more…

Meme Stocks Win the War against Wall Street

In today’s Money Morning…Wall Street gets a wake-up call…meme stocks aren’t going away…they only care about winning…and more…

Australia’s Biggest Homebuilder May Be Signalling a Major Shift for the Property Market

In today’s Money Morning…panic across Wall Street…a potential supply crunch for new homes…it pays to be a contrarian in a bear market…and more…