The Multiverse of Madness: Warren Buffett, Elon Musk, Inflation & Bitcoinby@nebojsaneshatodorovic
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3,369 reads

The Multiverse of Madness: Warren Buffett, Elon Musk, Inflation & Bitcoin

Too Long; Didn't Read

So, we have Warren Buffett, Elon Musk, inflation, and Bitcoin in the same sentence. It looks like the beginning of some joke. But, it isn’t because things are very serious. Mad Max serious.

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So, we have Warren Buffett, Elon Musk, inflation, and Bitcoin in the same sentence. It looks like the beginning of some joke.

But, it isn’t because things are very serious.

Mad Max serious.

Desperate times call for a voice of wisdom of old and wise. “The Oracle of Omaha” seems like the perfect candidate. Let’s hear what Warren Buffet has to say about inflation.

“The best thing you can do is to be exceptionally good at something,” the 91-year-old said Saturday. Mentioning professions like doctors and lawyers as examples, Buffett said that ”[people] are going to give you some of what they produce in exchange for what you deliver.” Buffett added that skills, unlike currency, are inflation-proof. If you have a skill that is in demand, it will remain in demand no matter what the dollar is worth.

The only problem is that you won’t get paid. If I got it right, I’m supposed to “produce” something someone else needs, and then in an “exchange,” I would get something I need - a “product.” Sounds like a solid plan. I can write in exchange for sandwiches. I can’t give you legal advice although I have a law degree, but I didn’t pass a bar exam, because you know - writing. So, we’re back to good old bartering which “is the exchange of goods and services between two or more parties without the use of money. It is the oldest form of commerce.” (Investopedia)

Old is gold, but without gold, actually. How about Bitcoin?

Bitcoin is often touted by supporters as a hedge against inflation, dubbed “digital gold.” (Yahoo Finance)

Great! Problem solved! Inflation can’t get satisfaction, after all. Just to make sure, give me a moment to quickly consult with the Oracle of Omaha.

“If you ... owned all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it,” Buffett said. “Because what would I do with it? I’ll have to sell it back to you one way or another. It isn’t going to do anything.” He described his views on farmland and rental properties versus bitcoin as “the difference between productive assets and something that depends on the next guy paying you more than the last guy got.”

What are you supposed to make out of this? Who you gonna call? Ah, I know.

The Guardians of the Bitcoin Galaxy

The Dogecoin “daddy” was among the first to bark at Warren Buffett.

The PayPal “daddy,” on the other hand, wasn’t gentle at all.

Silicon Valley billionaire Peter Thiel called Warren Buffett a “sociopathic grandpa from Omaha,” even as he denounced JPMorgan Chase boss Jamie Dimon and BlackRock CEO Larry Fink as “enemies of bitcoin.”

Thiel “referred to the troika of Buffett, Fink and Dimon as a “gerontocracy” that was standing in the way of a cryptocurrency revolution.”

Let’s leave it at that. It’s better that way. Let’s focus our attention on some more pressing questions. For example, what were these fine gentlemen up to during these tough times?

Relax Honey And Just Follow The Money

Everybody knows what Elon Musk did with $44 Billion, even those who did their best to try living under a rock. What about Warren Buffett?

Buffett told shareholders that right after he told them in his annual letter on Feb. 26 that he was having trouble finding anything to buy at attractive prices, Berkshire spent more than $40 billion on stocks over the next three weeks.

Wait! What? Berkshire. What’s that?

“Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska.” (Wiki)

Where did all that money go? Well, here and there. You know, only safe bets. Nothing spectacular and surprising as Twitter. The oil sector, Apple, and other usual stuff for Buffett.

Wait? What happened to invest-in-your-skills-during-the-inflation lecture? “Thee” perfectly rhymes with “me,” but only in cheesy quotes.

Buffett has embarked on a shopping spree the likes of which we haven't seen since the Great Financial Crisis

That's the most cash Buffett has splurged on equities in a quarter since 2008… Buffett, as patient as any investor when it comes to waiting for bargains, at long last pounced – and did so with surgical precision

And according to Bespoke Investment Group, almost 80% of his purchases came during the weakest part of the quarter. That's remarkable timing… Suffice to say that Warren Buffett is pretty adept at the whole "buy low, sell high" thing… But there's a second (and perhaps more urgent) factor driving Buffett's lavish spending on stocks right now: Inflation… When prices are rising at the fastest pace in four decades, cash is trash. That helps explain Buffett's biggest Q1 binge…

Do Androids Dream of Electric Sheep, And Electric Cars Too?

Oh, my dear Cypher, you were so right:

Getting back to Thiel and his This-Is-Sparta-Bitcoin “defense mechanism,” let’s say, to a certain degree, I can understand. But Elon? A sweet blue birdie became a social media bird of prey in his hands. Why? If he is crypto-friendly, he isn’t exactly crypto enthusiastic. Dogecoin started as some kind of a joke, or I was the one living under a crypto rock.

Musk just couldn’t let it go, could he? Why?

Did you know that Buffett is the biggest investor (with all due respect and apology for my ignorance for the following labeling) in the Chinese “version” of Tesla - BYD? I had no idea.

“Tesla is the world’s largest electric vehicle maker, delivering 308,600 electric vehicles in the fourth quarter, up from 241,300 in Q3, 201,250 in Q2 and 184,800 in Q1. But BYD is catching up. BYD sold 93,945 new energy vehicles in December, up 218% vs. a year earlier,” reports Ed Carson at IBD.

That tweet makes more sense now, doesn’t it?

And, Elon is a silver-tongued devil, not only on Twitter:

Elon Musk's EV maker reported strong sales for March — it delivered 65,814 cars from its Shanghai factory, up 85% from a year earlier. The company restarted production on April 19 — according to state-owned Xinhua, and even wrote a letter to the Shanghai government expressing its gratitude, according to Reuters.

A letter of gratitude is the least he should’ve done in a situation where at least 27 Chinese cities are under some degree of Covid lockdown, affecting around 180 million residents, according to CNN's latest calculations last week.

And, here we are, trapped in our multiverses of madness, sadness, bitterness, and helplessness. I can’t define inflation. I’m not an economist. But, there’s something I’m absolutely certain of. Investing your time in writing and reading stories on Hacker Noon is inflation-proof. Guaranteed!