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tl;dr
The crypto naysayers, led into battle by Charlie Munger, Vice chairman of Berkshire Hathaway, are a little rattled.
Market Snap
Market Wrap
That’s now two breaches of $24k to the upside in the last day or two. But I caution you to temper your excitement, for significant price gains from here are going to take some time to play out, for all the reasons we have discussed during January.
Occasional Series — Djerba
As promised, the publication schedule of the next week of CCCs will be somewhat compromised. Writing as I am from Djerba, an island off Tunisia that is wonderful in so many ways, there are just two drawbacks. My internet connection is not perfect, but my laptop, which I thought I had bought in the last decade, appears to only work relatively quickly when hooked up to a steam engine.
Curious Cryptos’ Commentary — Charlie Munger, some important bloke at Berkshire Hathaway
Both Munger and his younger sidekick Warren Buffet are famous for their anti-crypto stance, if little else.
The dark forces of centralisation, worried as they are by the recent resurgence of crypto prices generally, have reliably wheeled out Munger to try to sow some seeds of fear and doubt.
In an editorial in the Wall Street Journal (an obvious choice given the threat that cryptos poses to the legacy financial system) Munger trots out some predictably dull comments about cryptos that are being breathtakingly reported elsewhere as “devastating” to the crypto world.
Let’s take a look at this “devastating” critique.
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“A cryptocurrency is not a currency, not a commodity, and not a security.”
Oops, Munger has set off down a path wished for by crypto maximalists (*). Surely, he is mistaken?
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Quickly realising the contradictions inherent in that statement and his previous disdain for all things crypto, Munger reaches for the centralised response beloved by dictators and demagogues worldwide. He called on the US authorities to use “… two interesting precedents”:
“In the first precedent, the communist government of China recently banned cryptocurrencies because it wisely concluded that they would provide more harm than benefit.”
First of all, China has not “banned” cryptocurrencies, for such a concept cannot work in practice.
Secondly, given the number of things that China has “banned” (Uyghur Muslims are high on President Xi’s list) that libertarians take an exception to, I am not sure the word “wise” can be applied to murderous Xi and his amoral henchmen.
But most of all, I am a little surprised that a billionaire who has made his money from raw blooded capitalism seeks inspiration from a country that claims to be communist.
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Munger then makes clear his real motivation, when revealing the second of the precedents he referred to above:
“And, in the second precedent … what the English Parliament did … It banned all public trading in new common stocks and kept this ban in place for about 100 years.”
So, here we have a man who has used his enormous intellect and financial acumen to help build one of the most successful companies — in the form of a financial conglomerate — now berating the capitalism that enabled his success, and compounding that error by suggesting no-one should be able to challenge Berkshire Hathaway’s hegemony for the next century.
All quite extraordinary.
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But of course, the story does not end there.
He quoted Mark Twain when describing his view of cryptos:
“A mine is a hole in the ground with a liar on top.”
Yep, Berkshire Hathaway, over which Munger and Buffett have had total control for decades now, is the owner of companies related to the mining industry, and actual mines.
Who is standing atop of those mines, Munger?
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(*) But crucially, not by the CCC.
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