When it comes to Bitcoin (BTC), Berkshire Hathaway’s Charlie Munger has got it wrong, according to crypto investor Dan Morehead.
In a new letter to investors, Morehead responds to Munger’s comments about Bitcoin in a recent interview with the Wall Street Journal.
Munger said that the creation of Bitcoin – which he calls “an artificial currency” – is an unnecessary threat to the otherwise tried and true systems of money
“The only way to get from hunter-gathering to civilization that we know of that’s ever worked is to have a strong currency. It can be seashells, it can be corn kernels, it can be a lot of things. It can be gold coins, it can be promises in banking systems like we have in the United States and England and so on.
When you start creating an artificial currency…you’re throwing your stink ball into a recipe that’s been around for a long time, that’s worked very well for a lot of people.”
Morehead, who oversees $4.2 billion in assets at Pantera Capital, says that corn kernels, or Munger’s example of a “strong currency,” have inflated at an exponential rate, making the preservation of wealth impossible over the long term.
“Corn kernels?!?!? Whaa? Monsanto’s Round-Up created staggering corn kernel inflation. In 1961, the world production of corn kernels was 205 million metric tonnes. It’s now 1,210 million!
(PRODUCT PLUG: Bitcoin will be 21 million…forever.)
Here’s the value of one corn kernel – priced in anything of fixed quantity. It’s crashed 83%.
Would he really rather save his wealth in an inherently debasing currency like corn kernels – or in one that has appreciated 117% a year, on average, for fourteen years?”
Morehead says the inflationary nature of past money systems has only benefited a small number of people at the top of the wealth pyramid like Munger.
“There are billions of people for whom sovereign-issued money isn’t working out too well. We believe the vast majority of people on Earth would have much better lives with Bitcoin…
Yeah, maybe the inflation generated in the U.S. dollar has been good for a small number of rich, asset-owning guys like Munger, but not for the vast majority of people – both now and in past centuries.
The vast majority of the world’s eight billion people have a currency that didn’t work out well. Actually, most of the world’s citizens are victims of sovereign-issued, life-changing currency disasters.
Even one of the least-bad sovereign monies is a clear example of how sovereigns debase their paper money.”
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