Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 22
Recently (and despite no one asking) I opined on Shred'm about fiat currencies, particularly the USD: The short version: a stable fiat currency is utterly necessary for the world we live in. The US dollar has been the default (reserve) currency for the lifetime of virtually everyone living today, so it – like the ecosphere – are taken for granted...Historically, a given fiat currently is stable until it’s not – that moment being when it loses trust as a permanent store of value. Exactly when that shift happens is, I think, most akin to Hemingway’s description of going bankrupt: gradually, then suddenly.
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This morning, I open up the annual Chairman's Letter and read:
"Paper money can see its value evaporate if fiscal folly prevails. In some countries, this reckless practice has become habitual, and, in our country’s short history, the U.S. has come close to the edge. Fixed-coupon bonds provide no protection against runaway currency."
and
"never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part."
(bolding mine)
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I'm a scientist, and a businessman in a very modest way, but by no means an economist. But -- Dunning-Kruger be damned -- I stand by a set of conclusions I reached twenty years or so ago:
- stable fiat currencies are utterly necessary for the world we live in
- they work well only as long as responsible, mature adults are in charge of the currency printing presses
- and since that will not happen uninterruptedly forever, all fiat currencies will eventually go to zero
-- sutton
awfully glad our Chairman is staying, for now, in Treasuries
No. of Recommendations: 4
Yeah that currency comment jumped out to me as well. We currently don’t have many rational adults running things in the US IMO, so I wonder about the value of our dollar going forward.
I’m an unsophisticated retired X-car dealer, but my one good idea was to plow almost all our earnings into Berkshire stock over the years instead of buying and building more dealerships like my car dealer friends (they are constantly stressed out). I don’t understand how to hedge against a decline of the USD, and all our investments are currently in Berkshire and US dollars (t-bills, MM accounts).
What to do, if anything?
No. of Recommendations: 3
wont work for everyone, and may not work at all, but I have bought property in Europe, that if I had to sell might net me enough to see out my years just above the breadline. meantime, I get to enjoy using it part of the year. I hope I never have to let you know how it works out :-)
No. of Recommendations: 7
What to do, if anything?
Keep doing what you’re doing, and sleep well.
No. of Recommendations: 6
never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part.Fiat currency is being discussed here, so I will leave this briefly. This video is largely accurate:
https://www.youtube.com/watch?v=5RpPTRcz1no If you want to dismiss it, look at a16z investments, look at the 10 year history of the people involved and their relationships. Destroying the USD to replace it with cryptocurrency is a desired outcome to achieve a strategic goal in their view of an idealized technocracy. A lot of seemingly irrational actions will make sense in this framework.
Anyway, I thought it was a nice annual letter so far. I haven't gotten past the introduction, but am looking forward to the Insurance section.
