Warren Buffett Warns More Banks ‘Will Go Bankrupt,’ Calls Bitcoin a ‘Gambling Token’ As Prices Rise Above $30k
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(Kitco News) More banks “will fail,” but people should not worry about the safety of American bank deposits, said Warren Buffett, the billionaire chairman of Berkshire Hathaway.
“People shouldn’t be worried about losing their money and their deposits in an American bank, but the message has gotten very confused,” Buffett told CNBC on Wednesday. “The costs of [Federal Deposit Insurance Corp.] borne by the banks. Banks have never cost the federal government a dime … No one is going to lose money on a deposit in an American bank.”
Buffett pointed out that the current banking crisis does not resemble the environment that triggered the 2008 global financial crisis.
“You don’t have to make a stupid decision by leaders to panic the entire American citizenry about something they don’t need to panic about,” he said. “They haven’t made the same kind of mistakes that they did back in 2008 or ’09, but they’ve mismanaged assets and liabilities and bankers have been tempted to do that forever, and then it bites them in a big way.”
When talking about inflation and how the US is doing it, Buffett noted that “extreme inflation is always a possibility.”
Both inflation and recession “can cause a lot of trouble, and recessions can turn into depressions,” he added. “You can disrupt an economy much easier than you can put it back together.”
On Bitcoin, which is witnessing a comeback as it rises above $30,000, Buffett said his views on the cryptocurrency have not changed.
“Something like bitcoin, it’s a gambling token,” Buffett said. “It has no intrinsic value.”
He once again compared buying Bitcoin to gambling. “People love the idea that they’re going to make more money tomorrow,” he said. “We’ve had an explosion of gambling essentially … the urge to participate in something where it looks like easy money – it’s a human instinct that’s been unleashed.”
Meanwhile, Bitcoin has seen a recovery, with prices at $30,460.39, up 8% in the past seven days.
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