Is Today’s Venezuela the Future of America?
Charlie Munger knows what’s going on, and he has some warnings about printing more money.
“Both parties have learned they can print all the money they want.”
We couldn’t have said it better ourselves.
In fact, we have said it. Over and over again.
But this time it’s not us. This time it’s Charlie Munger speaking.
“In the end, if you end up printing too much, you end up like Venezuela,” he said in an interview the other day.
Munger is Warren Buffett’s partner and Vice Chairman of Berkshire Hathaway.
“Who knows when money printing gets out of control,” he said in an interview the other day.
“In the end, if you end up printing too much, you end up like Venezuela,”
-Charlie Munger
“I am so afraid of a democracy getting the idea that you can just print money to solve all problems,” he warned. “Eventually that will fail.”
When paper money does fail, as it always does, people rush to the safety of gold and silver. But by then it’s too late. Their wealth has already been destroyed. Nobody wants the failing currency.
Here’s what we wrote last year about the parallels with Venezuela:
“What is the fundamental difference between any failed currency and the US dollar? Except for degree, not much. Like other currencies that have in time returned to their ultimate commodity value (what is the value of little rectangular pieces of paper, especially those that have already been printed on?) the US dollar in unbacked and issued without restraint.
“If you think that is an exaggeration, let me point you to the trillions of dollars the Fed created out of thin air to buy government bonds and toxic mortgage securities from the money center banks in the years between 2008 and 2015. That’s money printing on a Venezuelan scale!”
We’ll conclude today post with a few words from a January piece called The New Venezuela, in which we wrote about the socialist juggernaut running loose in America:
“Their prominence and the spread of socialist ideas is a really good reason to start attending to your precious metals portfolio today. The left is determined that America should tread the path of socialism and become the next Venezuela. Socialism’s manifest failures are not enough to dissuade them from trying to tank what is left of our prosperity and charting a ruinous course for Americans.
“Millions of impoverished Venezuelans wish they had transferred their wealth into gold and silver while they still could. Before their Hugos and Maduros took over.
“Alas, it is too late for them. But not for you.”
