Yahoo Finance 'Warren Buffett knows this': Michael Saylor warns that the US dollar is on track to lose 99.9% of its value
The U.S. dollar has consistently upheld its role as the world’s leading reserve currency, valued by investors as a safe haven due to America’s robust economic foundation and political stability. However, MicroStrategy chairman and co-founder Michael Saylor holds a highly skeptical view of the greenback.
During an episode of the PBD Podcast hosted by Patrick Bet-David, Saylor compared the U.S. dollar to the Argentine peso.
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“The only difference [between] the U.S. dollar and the [Argentine] peso is, whereas it takes 20 years to lose your family's fortune in the peso, it takes about 90 years to lose your family's fortune in the dollar,” Saylor stated.
He underscored this point with an example involving his own home.
“My house in Miami Beach was $100,000 in 1930. It was appraised at $46 million a few years ago,” he said. “Do the calculation. It's on a path to be worth $100 million, which means that the U.S. dollar will have lost 99.9% of its value over 100 years. Warren Buffett knows this. Charlie Munger knows this.”
MicroStrategy (MSTR), a publicly-traded analytics and business intelligence company, began hoarding bitcoin in 2020 and owns 226,331 bitcoins as of June 20. This is slightly more than 1% of all bitcoin that will ever exist.
Money in the bank
Inflation can lead to a decline in a currency's value. However, it's worth noting that the U.S. is in a far better position than Argentina in this regard.
In May 2024, Argentina’s yearly inflation was a whopping 276.4%. In the U.S., the consumer price index recorded an annual increase of 3.3%.
Due to the erosive effects of inflation on purchasing power, Saylor questions the wisdom of keeping dollars in the bank.
“Basically, the bottom line there is, your money in the bank isn't money. Okay, so the answer is, you shouldn't have any money in a bank,” he said. “You're basically losing 7% of all your wealth every year in a good year, if it's the dollar; you're losing 15% of your wealth in a not good year, if it's the dollar.”
Over extended periods, inflation can significantly diminish Americans' purchasing power.
For perspective, according to the inflation calculator from the Federal Reserve Bank of Minneapolis, $1 in 2023 has the same buying power as about $0.05 in 1930, indicating that the dollar has depreciated by 95% since then.
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‘Strongest money’
While the U.S. dollar is recognized globally for its strength, Saylor believes there’s a superior alternative.
“The strongest money in the world is bitcoin, because bitcoin is absolutely capped at 21 million,” he said.
Saylor was referring to bitcoin’s supply limit, which is set at 21 million coins. This contrasts with fiat currencies, which central banks can issue in unlimited quantities. Bitcoin's fixed supply limits its vulnerability to inflation.
“It is global money. You could take a billion dollars of bitcoin across the border, you can transfer it to a counterparty, and no government can interdict that, and nobody can inflate that,” Saylor added.
As the world’s largest cryptocurrency, bitcoin has been volatile as of late — yet its growth remains remarkable. Its price has surged 37% in 2024 and 94% over the last 12 months when measured in U.S. dollars.
It’s important to note that while Saylor mentioned Buffett during the conversation, the Oracle of Omaha does not share his enthusiasm for bitcoin. Buffett famously stated at the 2022 Berkshire Hathaway annual shareholder meeting, “If you told me you own all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another.”
Buffett has also expressed strong confidence in the dollar’s global status. In 2015, he remarked, “I think the dollar will be the world's reserve currency 50 years from now, and I think the probabilities of that are very high.”
Finally, Saylor’s experience with his house on Miami beach underscores another investment insight: real estate can serve as an effective hedge against inflation. While a multi-million dollar mansion like Saylor's may be out of reach for many, real estate investment has become more accessible through real estate investment trusts (REITs) and crowdfunding platforms.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
