Berkshire Hathaway VC: “If You End Up Printing Too Much, You End Up Like Venezuela”


Berkshire Hathaway Vice Chairman Charlie Munger says political leaders in the US and Europe should not push central banks to cut interest rates.

“I am so afraid of a democracy getting the idea that you can just print money to solve all problems. Eventually I know that will fail,”

said Warren Buffett‘s longtime investing partner before adding,

“You don’t have to raise taxes, you just print.”

“In the end, if you end up printing too much, you end up like Venezuela,”

said Munger. Venezuela that is currently in the midst of hyperinflation and an economic and humanitarian crisis has been used as a cautionary tale about socialism.

Though Munger doesn’t think the US is anywhere near a situation like Venezuela, he did say that it is dangerous when a democracy thinks it can print money to solve all of its problems.

During the same interview with CNBC, Buffett also commented,

“I could not conceive of a world where you would have full employment, 5% budget deficits … and have the long bond at 3%.”

Countries Around The World Pushing For Interest Rate Cuts

Recently, as we reported the largest hedge fund Bridgewater Associates founder and manager Ray Dalio also said in his LinkedIn post how the coming of Modern Monetary Theory (MMT) is inevitable.

“It is inevitable that this shift will happen because it is inevitable that central bankers will want to ease when interest rates are pinned at 0% and when quantitative easing will be ineffective in achieving the goal,”

said Dalio.

Just last month, US President Donald Trump while attacking the Federal Reserve called for the central bank to cut interest rates by 1 percent and to further implement money printing quantitative easing. Trump raised concerns that high-interest rates could slow down the economic growth under his presidency.

Trump's call for rate cuts came despite a strong first quarter that saw GDP rose at a 3.2 percent after economists predicted little to no growth. Last week, the Fed voted to keep interested rates steady.

Countries like Switzerland, Japan, Sweden, and, Denmark already have negative interest rates while others are on their way to zero. Currently, New Zealand and Australia both are mulling interest rate cuts.

This is where arises the need for a global currency that can’t be printed out of existence and is not controlled by governments. And the answer to this is Bitcoin!

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