Charlie Munger on Bitcoin, Corporate Taxes, Bank Regulation & Fed Policy - CNBC Interview

Becky Quick asks Charlie Munger about Bitcoin. Munger: 'I think it's rat poison.' Quick: 'Put him down as undecided.' Munger admits he doesn't understand what they're trying to do with it but regards it as 'deeply flaky.' Bill Gates offers different view: 'I think it's a technical tour de force but that's an area where governments are going to maintain a dominant role.' Warren Buffett diplomatically says 'I think either Charlie or Bill is right.'

Becky notes Munger and Buffett disagreed on corporate tax rates at the weekend meeting. Munger: 'I think it's a disadvantage to have your tax rate less than the tax rate elsewhere in the world and so I don't think we're in total control of our own tax rates. Would be crazy to have tax rate in US 50% and have it 20% generally throughout rest of world. I'm for higher taxes but I think this should be on individuals and consumption. I like a low-ish corporate tax rate.' When asked if should be considerably lower: 'Somewhat, yes. Somewhat, slightly.' Warren disagrees: 'Charlie and I have disagreed on lots of things over the years. We've never had an argument over 50 years but we do disagree sometimes. US corporate taxes are 1.7-1.8% of GDP. If you go back some years they were 4%. We did well under those conditions. Business is doing extraordinarily well and since we have to raise money from someplace, I see returns on equity in business compared to interest rates at incredible levels. If you're looking for who to tax more, I think corporations should be part of that act.'

Banks complained about being over-taxed and over-regulated. Becky notes Warren feels comfortable about investments in Wells Fargo, U.S. Bancorp but Charlie is less optimistic long-term about banks. What worries Charlie: 'I think too many bankers go crazy. It does too much damage when it happens. So I'm for more bank regulation not less.' What form should it take? 'I would deny their ability to have huge derivative books and all kinds of things.' Quick asks if derivatives are still too large a position on some books. Munger: 'Sure.' On how to regulate: 'Well if you let me do it it would take about a week. What's lacking is the will not the power. The will not the power.'

Becky references Munger's quote from shareholder meeting: during first bubble, instead of Alan Greenspan taking the punch bowl away before people got totally drunk, they increased the alcohol proof. Munger: 'I think that's right. What I said was if you're not confused by what's happening now you don't understand it. Even the people in the economics profession are confused. We're sort of in uncharted waters.' When asked about current Fed policy and if punch bowl/alcohol proof is too heavy: Munger responds 'Well what I said was if you're not confused by what's happening now you don't understand it. Even the people in the economics profession are confused. We're in uncharted waters in Germany yeah. Now we had a huge huge problem so it undoubtedly required a lot of medicine but we have not yet seen medicine like this dosed out and then the after effects.'