Warren Buffett’s right-hand man and Berkshire Hathaway’s vice chairman Charlie Munger has been a vocal critic of cryptocurrencies, previously likening them to “venereal disease” and saying that anyone who sells crypto is either “delusional or evil.”
In the wake of FTX’s collapse this month, Munger is doubling down on those criticisms.
“It’s partly fraud and partly delusion,” he told CNBC on Squawk Pod. “That’s a bad combination. I don’t like either fraud or delusion, and the delusion may be more extreme than the fraud.”
Munger added that he does not believe crypto is a real asset—and it should have never been allowed.
“This is a very, very bad thing,” Munger said. “The country did not need a currency that was good for kidnappers… There are people who think they’ve got to be on every deal that’s hot. They don’t care whether it’s child prostitution or bitcoin. If it’s hot they want to be on it. I think that’s totally crazy.”
When it comes to the Federal Reserve, Munger had kinder things to say than some of his other billionaire investor counterparts.
He argued against the idea that the Fed should be blamed for potentially pushing the economy into a recession in an effort to get inflation down to 2%.
The Fed is “willing to have a little recession in order not to have out-of-control inflation”—that’s what they’re supposed to do, he said. “They’re supposed to be the one guy at the party that doesn’t hang around the punch bowl getting drunk.”
His remark references an old saying that it’s the Fed’s job to take away the punch bowl just as the party gets going, derived from a 1955 speech by Fed chair William McChesney Martin Jr. to describe the institution’s responsibility to prevent high inflation.
But when CNBC’s Becky Quick responded that a lot of people say the Fed is the one who provided the punch bowl, Munger said: “I think that’s pushing it.”
“We were in enough trouble when this thing started, that if the Fed hadn’t done what it did—which was very aggressive—we would have had one hell of a mess, which would have been way worse than what we have now,” he said.
Inflation hit a year-over-year four-decade high in June at 9.1% before slowing to 7.7% in October. That has stirred hopes and expectations that the Fed could pivot, and slow the pace of rate hikes, after an aggressive approach this year that lifted the benchmark rate to a range of 3.75% to 4%.
This story was originally featured on Fortune.com
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