 That's all I know about bagging probably more Station three Here's a wonderful question and mr. Munger. Hi That's 13 years old and this is my sixth annual Berkshire half-way shane And I've had the privilege to ask you both questions and years past My question for you today is the following As you know the US national debt is currently at an estimated $31 trillion making up about 125 percent of the US GDP In the meantime over the past few years the Federal Reserve has telegraphed that they intend to monetize the debt by printing trillions of dollars Even as they insist that they're fighting inflation already other major economies in the world such as China Saudi Arabia and Brazil are moving away from the dollar in anticipation of this My question is are we likely to face a time in the future when the US dollar is no longer the global reserve currency? How is Berkshire prepared for this possibility and what can we do as? American citizens to attempt to shelter ourselves from what's beginning to look like the beginnings of D-dollarization well Now we all know that's a great question because it's been all over Twitter I know I've spoken to a lot of friends about it a lot of people are concerned We've had crypto rise a lot recently The Bricknations China and Russia they keep talking about Getting rid of the dollar getting rid of treasuries. So everyone's going to be very interested in how Warren Buffet answers this Diopad has completely transformed how we support customers. It's built in AI helps my agents I Should ask you to come up here and answer some questions. I mean It's very interesting. I mean we are the reserve currency and I see no option for any other currency to be the reserve currency and and I think that Nobody understands the situation better than J. Powell and I but he's not in control of Physical policy and every now and then he drops a few hints and there was no question that when the When when when the end pandemic broke out? I mean it was a semi-war like situation, but Nobody knows How far you can go With the paper currency before it gets out of control if and particularly if you're the reserve world's reserve currency nobody knows the answer to that and You don't want to try and pick out the point of where it does become a problem because then it's all over and I think we should be very Very careful. I mean, you know, we all learned Keynesianism and we applied it in World War two to the advantage of the country and we did every couldn't we could to prevent inflation during the war and then War ended in August of 45 And I think in January 46, and I'm not giving you exact figures at all now, but in January 46 I think the rate of inflation was it You know something like 1% or thereabouts and by the end of the year, I think it was like 15% and again I'm doing this from long memories, but but It's it's easy For America to do us a lot But if we do too much It's very hard To see how you recover Once you let the genie out of the bottle and People lose faith in the currency and they behave in an entirely different manner Then they do when they feel that if they Put some money in the bank or have a pension planned or whatever it may be that they're going to get to have something with roughly equal purchasing power and it just changes the economy and all kinds of things can happen then and I can't predict them and nobody else can predict them, but I do know they aren't good and We will see and I do this is you know, I I voted for both parties and it's it's It's not limited to politicians to be the party or anything of the sort People take positions some of them understand what they're doing some of them don't understand what they're doing and You know if they put me on Some medical board. I don't understand what I'm doing. You know, it's not that there's nothing wrong with the fact that you that You can't master everything you can all be Isaac Newton, but but you can't go around Pretending you do or making decisions on it and and we Are not as well off in relations to curbing inflation expectations, which becomes self-fulfilling And We are not as well off as we were earlier and Berkshire is Better prepared than most investments for that kind of a period up But I said this in the annual report, but we aren't perfectly prepared because there's no there's no way to perfectly prepare You don't know what course of action will occur and It's a very political decision now it's a tribal decision to some degree and and you hope for leadership that that actually Will do something recognizes the problem and America's an incredible society rich, you know, we got everything going for us, but that doesn't mean we can just print money and definitely that as as that and It'll be interesting to see how it turns out Charlie At some point Printing money to buy votes will be counterproductive. Yeah, and we don't we don't know exactly where that comes And if something is going to be Dangerous and unproductive you ought to keep it a fair distance away Now if you have a culture that is exceptionally strong like Japan They have done some strange things there, but they couldn't have been the reserve currency No, of course not and but Japan bought back most of the national debt and most of the a lot of the common stocks and Dead it just the Federal Reserve owns practically everything in Japan and the country's working It's in and 30 years of economic stasis, but it's not going to help. I really admired Japan and But I don't think we should try and imitate it. I don't think we're as good as good at Japan at taking They have a cohesive culture and we don't Charlie. That's exactly right In Japan everybody's supposed to suck up and cope and in America we complain So I hope you come next year with a tougher question But and thank you and I predict I would love to be being born again today in the United States I mean we We can do a we can do a lot of dumb things and get away with it We can't do an unlimited number. There are people who care about that and You know You have to be willing to be Extraordinarily unpopular. I mean Paul Volcker There were there are other Federal Reserve Here are people that would not have not have done what they did. It's just it's it's too uncomfortable and There used to be a politician in Nebraska And if you asked him some really tough question like you know, how do you stand on abortion or he would look you right in The eyes they I'm all right on that one and they move next to well That's what people have done basically on inflation and they they one way or another they They say I'm all right on that and then they they don't really think about what the consequences of their actions could be Particularly and it's so much fun to There's 435 of you to just be one of 435 instead of being the person actually responsible anyway, I am still next to the Question of two superpowers and when you get into really destroying a planet destroying The reserve currency of the world when there's really no substance and forget about all the toys, you know with with I mean It's a joke to think of any tokens or That sort of that that that that's madness, but but it's also madness to just keep printing money. Yeah, and We know how to do it and we actually came from a money printing money printing economy in World War two which was required and we suffered significant inflation the price level I mean there are a million ways to judge it, but it's maybe ten times what it was then or something like that Well, that's that's getting close to the edge of where you don't want to You don't want to hold dollars anymore. You want to hold something else One old real estate you want to hold an interest in a business. There's a lot of good way your best your best Defense is your own earning power if you're the best doctor in town if you're the best lawyer in town If you love a teacher in town or even if it's the 10th best or 10, you're gonna make a good living. I mean you know the economy is productive and You will succeed With your talents, but you won't succeed by hoarding dollars. You'll just be you'll just succeed by the fact that you're your value to the community which is a rich community overall is sustained and So the best investment is always in yourself. That's the answer. I would give you well, we have a situation where we've learned to print money in gobs and Little a big chunk of our young people go right into wealth management This is like we did Like we did. Yes, we've been bad examples And I want to say that I didn't realize wealth management was gonna get so big when I went into it And I apologize for what's happened Anyway, you did well Becky So that was my favorite answer from the 2023 annual shareholder meeting he speaks in code because I Don't think he wants to shake the boat but he mentioned Paul Volcker and the 70s and He lived through that and if you read through the shareholder letters That was a time when Brookshire was actually not even keeping up with gold inflation was so out of control And he also mentions Japan Japan has had a problem with deflation And they've been printing money and having trouble to create a bunch of value and Stimulate the economy and a lot of economists think that war headed in that direction somewhere between Japan and High inflation History never repeats exactly at rhymes But if we get asset prices falling and they'll have to inflate and if the debt gets too high and they can't afford high payments They'll also monetize the debt so a lot of code words but the government needs more revenue and the economy also needs to grow and It looks like both of those things will be heavy sandbags at least for the next few years That's what he's saying right there. He's saying expect less Don't be so optimistic because we've got some issues to deal with Hope you found it useful. If you did leave a comment like sub cheers