Charlie Munger: bailing out the banks was the right thing to do

published 25 February 2019

Was it right to bail out the banks using quantitative easing (QE money printing) following the 2008 financial crisis? Many people argue that today's political turmoil is a direct result of the decision by central banks (led by the Federal Reserve in the US, under Ben Bernanke) to take monetary policy to extremes. Yet Charlie Munger (pictured, below right), vice chairman of Berkshire Hathaway and the long-term, slightly less famous business partner of Warren Buffett, is in no doubt.

Munger also warns (as has Buffett) that today's investment environment is tougher than in the past. Firstly, valuations are currently very high.

But more generally, "the competition sorting through those opportunities is more intelligent and more aggressive and more numerous. Of course it's harder". As for the ever-growing US national debt, it's "in uncharted territory", he observes. Does he worry about it? He tries not to, he says. "In every era... a great nation will, in due time, be ruined... our turn is bound to come. But I don't like thinking about it too much."