Just like his cohort Warren Buffett, Charlie Munger has stories to tell himself. There’s been a lot of discussion of the one he recently posted about the ‘Death of American Capitalism.’ To sum it up, he states that America’s time is over. The global economy will grow and we will finally have to take a step on the sidelines. He also states that it’s all downhill from here. He says the ‘financial derivatives of mass destruction’ will continue to spoil ‘Wall Street’ to gamble their money in ‘bucket shops like the 1920s’. This will have a mass effect giving ‘25% of our GDP’ to the casinos and a profit of 22% to the casinos.
Charlie and Warren Buffett are the biggest capitalist and most powerful ones running the US engine. They would both like to continue this engine moving forward, but Charlie’s article is made towards gaining an audience and giving a conclusion to a path that we can still solve. The government might have to step in and prevent some of this ‘free market’ like these derivatives from occurring in the future. There are already steps in place like separating banks from being brokerages.
His article is mostly to tell a future that he does not want to see but it possibly might happen. We can do everything to stop it, but there will be gambling. We will be heading towards a lower status in the global market. Other countries will finally have their time to prosper. However, if we can keep pulling through engineers, we can continue to have our time. We’ve had economic problems every decade. We’ve always found a way to break through with innovation and creativity. We just need that magic system again. It won’t come through manufacturing like it has in the past. It will be through green energy, advanced technology, something the world needs and something only Americans would think of.
Here’s the article with his story: http://www.slate.com/id/2245328/pagenum/all/
and Marketplace’s interpretation
