Source: Golden Ten Data
Tesla CEO Elon Musk said the U.S. economy is “probably” already in a recession . This judgment is inconsistent with the views of economists and the performance of the existing data. Musk also reminded companies to pay attention to costs and cash flow.
According to a live video of Musk’s remarks posted by a Twitter user, Musk said at the All-In summit in Miami Beach:
When the recession has passed, the boom will come again. It could be a tough time, and I don’t know how long the recession will last, maybe a year, maybe 12 to 18 months.
Fears of a recession have grown recently as the Federal Reserve tightened monetary policy to curb the hottest inflation in 40 years. Still, the chance of an economic downturn next year currently stands at 30%, according to Bloomberg’s latest monthly survey of economists.
While U.S. GDP contracted by 1.4% in the first quarter, the weakness was largely due to a record trade deficit. Demand indicators — consumer spending and business investment in equipment — actually accelerated in early 2022. The Atlanta Fed’s GDPNow now expects U.S. GDP to expand 1.8% year over year in the second quarter.
Musk said a recession is not necessarily a bad thing. He said:
What often happens is that if the boom lasts too long, there will be misallocation of capital. Basically, money flows into areas that are not worth investing in.
Asked about billionaire Jeff Bezos’ recent comments on inflation, Musk said rising prices were simply the result of the Fed printing money . Musk and Bezos are the world’s richest and second-richest, respectively, according to the Bloomberg Billionaires Index.
“The real cause of inflation is that governments are printing a lot more money than they used to,” he said, adding that countries including Venezuela had already followed the same path. “The reasons for high inflation are not complicated.”
Musk said he’s a moderate who has voted Democrat “for the most part” in the past, but doesn’t like a Biden administration. Musk has previously accused Biden of downplaying Tesla’s role in the development of electric vehicles. “This government doesn’t seem to have done a lot of work ,” he said, adding that immigration policy needed to be addressed. “It’s very important to make America the destination for the best talent in the world.”
Additionally, Musk said that while he “may never have” voted Republican before, now he may change his mind in the next election.
Editor/Corrine
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