Jim Rogers Responds to Warren Buffet
and gave his opinion about Blockchain and Cryptocurrency
The first Saturday of May every year is a grand holiday for global investors — the annual Buffett shareholders meeting is held on this day. This conference with more than 50,000 participants attracted worldwide attention. Buffett’s words and deeds evoked investors’ nerves. At the meeting, 90-year-old Buffett bluntly stated that cryptocurrency is a kind of gambling behavior rather than investment behavior, and cryptocurrencies will have bad outcomes. Its gold partner Munger’s criticism is more direct: I also hate digital cryptocurrencies more than you do.
Buffett’s remarks at the shareholders’ meeting led to a drop in Bitcoin prices
Buffett’s remark made a storm. At the same time, Bitcoin prices fell for two consecutive days. The steadfast investor of many digital cryptocurrencies is not calm, thinking that Buffett is old. Co., Ltd., the co-founder of the world’s largest digital cryptocurrency exchange, Co., Ltd., ridiculed. “Warren Buffett missed the entire wave of technology, and of course will continue to miss the Cryptocurrency.”
On the first day after the Buffett shareholders’ meeting ended, the reporter had an exclusive interview with the co-founder of Quantum Fund and Jim Rogers, the famous investment expert with Buffett.
For the digital cryptocurrency investor’s criticism of Buffett, Rogers was agitated. “Are they investing even more than Buffett? If so, then they are eligible to slap on Mr. Buffett’s decision.”
Jim Rogers is Bitcoin’s steadfast loser
Like Buffett, this legendary investment guru is a devaluation of digital cryptocurrency. During his decades-long investment career, Jim Rogers accurately predicted the 1987 stocks disaster, the earliest forecast of the US subprime mortgage crisis in 2008, became the man of Wall Street, and was hailed as the most visionary investor. As early as 1970, Jim Rogers co-founded the Quantum Fund with Soros, and achieved an average annual rate of return of more than 50% for ten consecutive years.
Jim Rogers, Buffett, Munger, these most visionary investors in the world, why collectively see the digital cryptocurrency?
In a two-hour telephone interview with reporters, Rogers gave his own answer. Many opinions were sharp.
Q : Buffett’s shareholders meeting just ended in 2018. At the meeting, Buffett was pessimistic about cryptocurrencies. Some people said that he missed the wave of technology and missed the blockchain wave.What do you think of it?
A : Even if what they say is correct, then what? Mr. Buffett made so much money for himself and his shareholders. Did they invest more than Buffett? I mean, what about that? We all missed a lot of things, so what? I guess those critics have not invested in anything good.
There will always be smarter people in the world, and if so, they will be qualified to dictate Mr. Buffett’s decision. If someone is the smartest person in the world, they are qualified to criticize anyone. Those who criticized Mr. Buffett sounded like the smartest people in the world.
Q : You once said that you have never purchased digital currencies and have not participated in related investments. You also think that Bitcoin looks like a bubble, and has always been bearish on Bitcoin. Why are you not optimistic about the value of digital currency investment? What do you think is reasonable for bitcoin to fall?
A : I don’t know what the so-called reasonable price of bitcoin should be. I don’t know how to judge and analyze it. If you can give me a way, maybe I can analyze how much it is worth. The bubble I am referring to is that such an area, which did not exist a few years ago, but now there are tens of thousands of things in this area, and the price is rising. No matter what you think, I think this may be a bubble. Anything can rise hundreds or thousands of times in price within two to three years. It is generally a bubble, whether it is the Internet, gold, commodities, or anything else. So I don’t think Bitcoin will always exist.
There is no doubt that money will be transferred on the Internet in the future. One of the reasons is that the government does not like the high cost of printing, transporting and managing banknotes. Therefore, the government must hope that money will flow on the Internet in the future. With the development of technology and the support of the government, this phenomenon will certainly occur in the future.
If we go to China, we can not use paper money. One day, I wanted to buy an ice cream in Beijing, but the merchant could not sell it to me because he did not accept the paper money and there was no software available on my mobile phone. The merchant gave this ice cream to me. I have money, but he does not receive my money.
Jim Rogers predicts that banknotes will be replaced but will not be bitcoin
So banknotes will be replaced, and the government is happy to see this happening. If they do not use paper money, they can monitor more things. If everything happens on the Internet, the government will know what you are doing. They will call you and say you drink too much coffee this month. The financial industry will probably change because of the blockchain, but whether the digital cryptocurrency will survive is another problem.
By the way, I said that the government is happy to see money circulated through the Internet. Those engaged in the digital currency industry may say “We are smarter than the government.” But as the regulator, the government will say, “Whatever you like to do — No, this is the answer”, so although I do not like this result at all, the government can do so.
Q : Japan passed a law (Payment Services Act) in April 2017, recognizing that cryptocurrency is the legal currency and becoming one of the first countries in the world to make cryptocurrency a fiat currency, which has made Japan a Bitcoin trading volume first country. The speculative nature of cryptocurrency and its high risk and high returns make supervision a difficult problem. In your opinion, what positive impact will the Japanese economy have on the recognition of the legal currency status of cryptocurrencies? How should the Japanese government guard against the risks involved and in what areas should it strengthen supervision?
A : The Japanese government recognizes that cryptocurrencies are equivalent to fiat currencies and will play a role in the development of cryptocurrencies. As a result, more people will accept and use cryptocurrencies. Although I doubt it, there is a possibility that the Japanese government’s decision is correct. Perhaps at some future date, we will use cryptocurrency as a legal currency. I would like to remind you that one hundred years ago, people felt that they could use anything to trade, such as shells, gold coins, banknotes, and cattle, and they could all be treated as legal tenders. I remember people are using the “legal currency” they want to use, which is in line with people’s expectations. However, in the 1930s, the British government stated that this type of transaction was an act of treason. In other words, if you do not use the banknote issued by the Bank of England to trade, you will be executed for treason. There are many banknotes issued by banks, but the British government has issued a regulation of treason, which has caused many banknotes to disappear.
Even in the United States, people signed contracts with gold for trading years ago, but the U.S. government said that it is illegal to do so. Even if some contracts were signed 20, 30, 40 years ago, the government said that these contracts are no longer Effective, so people can not pay, can not be traded. Yes, people who manipulate digital cryptocurrencies may actually be smarter than us, but once the government wants to regulate cryptocurrencies, they can do it. Again, I don’t like this approach, but I know history well. We have ideas but they have power.
Q : Many people believe that the development of cryptocurrency will not affect the legal currency’s market position, but some countries (such as China) still prohibit the issuance and transaction of cryptocurrencies such as Bitcoin and Ethereum. In your opinion, what are the main reasons why these countries’ governments regard cryptocurrencies as threats? If they introduce an official cryptocurrency, what impact will it have on decentralized cryptocurrencies such as Bitcoin and Ethernet?
A : As you said, using cryptocurrency is illegal in China, but I suspect that many people in China are buying and selling cryptocurrencies. As I just said, the government likes to control, so the Chinese government believes that they have successfully implemented monetary control. People cannot use anything other than the renminbi as a legal currency. I do not appreciate this practice, but it is a fact. If you do not like it and use other things as a legal currency for trading, the Chinese government may find it and then punish you severely. This is not a good thing, but it can happen. That is no good for the development of cryptocurrency.
Q : On February 20, 2018, the Venezuelan government launched the official cryptocurrency “oil coins” with the aim of “going to dollarization”. The latest news is that Venezuela’s government department awards a new cryptocurrency “Caribbean” as an alternative to economic warfare. Do you think that the Venezuela government’s issuance of cryptocurrency can ease its high inflation rate? What is the real reason why the Venezuelan government launched the second official cryptocurrency “Caribbean Dollar”?
A : The Venezuelan government will do this because Bolivar is constantly devaluing. They can only find another way to save themselves. Ultimately, the government does not want to lose control. In history, the government likes to control and do everything in its power to control everything. Although this is not a good thing for citizens, the government seems more concerned about how to control everything.
Venezuela’s oil currency won Russia’s “Satoshi Satoshi” award
The Venezuelan government is now doing such a thing. If the Venezuelan people can choose to use their own currency, or cryptocurrency? They may prefer to choose cryptocurrencies. But the government wants to manage it is another matter. Although the oil coins issued by Venezuela are circulated online, such cryptocurrencies will still be subject to government supervision.
The government invented another form of currency to ensure that we use the currency within its jurisdiction. They can issue their own digital cryptocurrencies as Venezuela does now. Can it solve the currency problem in Venezuela? The answer is no, they have deeper questions than this.
Q : Blockchain technology will become a catalyst for the cashless revolution, helping to achieve cross-border remittances, improving identity and verification systems, and more. Due to the decentralized blockchain decentralization technology, a large amount of traditional infrastructure investment and technology development investment can be saved. Do you think blockchain is a great opportunity for overtaking in cornering in developing countries? What is the significance of creating a cashless society for developing countries? To this end, what kind of policies do these countries have to introduce and what changes do they make?
A : The use of blockchain technology can enable developing countries to change their existing operating models. For example, in Africa, many people never have a telephone. My room was connected to a landline and the phone rang. I just picked up the handset and talked. In the United States and many countries, there are tens of thousands of meters of cable used for communications, but Africa does not have such conditions, so many Africans cannot call. But now that they have mobile phones, they can no longer use fixed phones and use old ones. The same applies to blockchain technology, they can use this technology directly, rather than spend a lot of money to build infrastructure. Of course, the African economy will not become better or exceed other countries. I am not sure. After all, there are many factors that determine economic development. You said that the information technology in Africa will not exceed China. No, compared with many other countries, they are still less developed. But emerging technologies do help them.
Q : Tether has introduced the token Tether USD based on the stable value currency (USD) (USDT), 1USDT=1 USD. As the function of the cryptocurrency’s stable value and trading currency, its trading volume has long been at the forefront of more than one thousand cryptocurrency transactions worldwide, and its influence on the cryptocurrency market is significant and far-reaching. How do you evaluate USDT’s position and role in the field of cryptocurrency?
A : The U.S. dollar is an international currency that we use primarily to conduct international business transactions or store value. But people are now looking for another currency. For example, in countries such as China, Russia, and Brazil, they are trying to introduce a currency that can compete with the U.S. dollar because if the U.S. dollar gives the U.S. government the power to supervise them.Therefore, several countries are trying to develop new digital currencies. Whether new Chinese, Indian, Brazilian, and Russian currencies will appear, I cannot be sure. People are looking for other currencies to replace the dollar, which includes digital currencies. These currencies, including cryptocurrencies that compete with the US dollar, are valuable because the US dollar has acted as a medium for international transactions for more than 80 years or more. When people are discussing the value of Bitcoin, they should also consider the US dollar. Because whether we like it or not, the U.S. dollar is the medium for global trade, although the situation is changing. The U.S. dollar is still the medium of international transactions. Everything takes time.
Q : Recently, Soros and Wall Street giants have entered the field of cryptocurrency. What is your opinion? Will this industry really have more opportunities than traditional industries?
A : People learned from the past few millennia that there is always something popular in the commodity market. No matter what you sell, if you are a good businessman, you can earn money. I know that this market is very active and people are trading, but I don’t. I’m not a trader and I don’t spend a lot of time on it.
Quantum fund founder Soros is reported to invest in cryptocurrency.
I believe that if there is a chance, people will find opportunities to trade and profit from it. Will this phenomenon continue forever? No, no. People used to actively trade eggs and trade butter in the market. Now that cryptocurrency is active, it does not mean that it will always be active.
Q : So you think it’s an opportunity, but it won’t last?
A : I don’t know how long this phenomenon will last, but I know this is indeed an opportunity. Personally, I personally believe that this phenomenon will not last forever. But who knows, this world is full of variables. The blockchain will be very persistent, it will change all we know, but the blockchain is a whole new thing.
Q : Do you mean that the cryptocurrency is a different thing?
A : Blockchain and cryptocurrency are two completely different things.
Q : But they said that the blockchain is not a blockchain without the cryptocurrency. You think just blockchain technology will stay?
A : Well, I mean that blockchain technology will be very persistent, if you must say so.
Q : The blockchain has led a new round of scientific and technological revolutions and industrial revolutions. The exploration of blockchain technology in various fields is also increasing. In addition to the financial sector, where do you think the blockchain technology has tremendous room for development? If you want to get a wide range of applications in these areas, which key issues need to be resolved?
A : I speculate that the application of blockchain technology started from the financial industry, because this is the easiest place to apply. The use of blockchain technology to deliver assets, transaction payments, and security has already had an impact on the financial industry, and it will continue. Things usually start from one industry, and some people will gradually apply to other industries, such as the automotive industry, communications industry. The telegram was eventually used to transfer funds. The blockchain has already entered the financial and currency realm, and it will continue and get something new. What other industries can use blockchain technology? Everything, school-age children take exams, get results, sign up for a hotel, pay for taxis, and buy ice cream in China will eventually be everything.
Q : There are rumors that MUC (Mousse main chain) is a digital currency that is officially launched by the U.S., and that your investment team is involved in the operation. Are you clear about this?
A : I don’t know what MUC is. I have never heard of MUC.
Q : What do you most want to say to cryptocurrency investors?
A : Be careful and be very careful. Many of you will lose everything, as I told you before. There were thousands of computer companies in the past. You can only say one, that is IBM survive. There were hundreds of Internet companies in the past. You could only say a few of them success.