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Berkshire Hathaway's Charlie Munger: 'Since I never buy any gold, I never buy any bitcoin'

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(Kitco News) Berkshire Hathaway's vice chairman and Warren Buffett's business partner Charlie Munger had this advice for investors: don't buy bitcoin or gold.

"I don't think bitcoin is going to end up the medium of exchange for the world. It's too volatile to serve well as a medium of exchange. And it's really kind of an artificial substitute for gold. And since I never buy any gold, I never buy any bitcoin, and I recommend other people follow my practice," Munger said during an interview at the Daily Journal's annual shareholder's meeting.

This answer was in response to what is the biggest threat to banking — bitcoin or digital wallets like Apple Pay or Square.

"I do think that a properly run bank is a great contributor to civilization and that the central banks of the world like controlling their own banking system and their own money supplies," Munger added.

Berkshire Hathaway's vice chairman also dismissed bitcoin as an investment, saying: "Bitcoin reminds me of what Oscar Wilde said about fox hunting. He said it was the pursuit of the uneatable by the unspeakable."

When asked whether it was crazier for bitcoin to hit $50,000 or Tesla to reach $1 trillion market cap, Munger responded: "Well I have the same difficulty that Samuel Johnson once had when he got a similar question, he said, 'I can't decide the order of precedency between a flea and a louse,' and I feel the same way about those choices. I don't know which is worse."

Munger added that "we will not be following Tesla into bitcoin."

His comments come as the markets digest Warren Buffett's annual letter to Berkshire Hathaway shareholders, which was released on Saturday.

In the letter, Buffett said not to bet against America: "Despite some severe interruptions, our country's economic progress has been breathtaking. Our unwavering conclusion: Never bet against America."

"Berkshire's depreciated cost of these domestic 'fixed assets' is $154 billion. Next in line on this list is AT&T, with property, plant and equipment of $127 billion," he said.

Buffett pointed to the ownership of two American businesses — BNSF Railway and Berkshire Hathaway Energy (BHE).

The 90-year-old billionaire also commented on bonds, saying that low interest rates hurt their appeal.

"Bonds are not the place to be these days," he said. "Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future."

Some social media users described this year's letter as "tone-deaf," pointing out that not enough attention was given to the pandemic, and no mention was given to more controversial social issues plaguing the country today.

Others remained big fans of Buffett, praising the letter for its wisdom.

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