- Elon Musk said he believed the United States was likely in a recession that could last up to 18 months.
- The billionaire criticized the Biden administration for printing “one million more dollars than there are.”
- Musk made the comments at a technology conference in Miami on Monday.
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Elon Musk said Monday that he believes the United States is in a recession that will worsen.
Tesla’s founder and CEO commented on a video of the All-In, a Miami technology conference hosted by the All-In podcast, where he said the recession could last from a year to 18 months.
“Recessions are not necessarily a bad thing. I’ve been through a few of them. And what tends to happen is, if you have a boom that lasts too long, you get the wrong distribution of capital. It’s starting to rain money on fools, in principle, “Musk told the conference.
When this situation “gets out of control”, the economy has an incorrect distribution of human capital, “where people do things that are stupid and not useful to their brethren,” he continued.
Musk joked that the “economic enema” would eventually have to “clear the pipes.”
“And something like stupid companies go bankrupt, and those that make useful products are prosperous,” he said.
“And there’s certainly a lesson here that if someone makes a useful product and has a company that makes sense: make sure you don’t run things too close to the edge in terms of capital,” Musk continued. “They have some capital reserves to withstand irrational times.”
Musk seems to blame President Joe Biden and his administration for the recession.
“This administration doesn’t seem to be doing much,” Musk said. “The Trump administration, leaving Trump aside, had a lot of people in the administration who were effective in doing things.
“The obvious reason for inflation is that the government has printed a million more money than it had. The government can’t just issue checks for excessive income without inflation. The speed of money is constant,” Musk said.
“It’s not super complicated,” he added.
The billionaire has been critical of the Biden administration in the past. Earlier this year, Musk called Biden a “puppet of wet socks in human form.” He has repeatedly criticized the administration after the White House failed to invite Tesla to an electric car summit and praised General Motors and Ford for Tesla.
“It’s hard to say what Biden is doing to be completely honest,” Musk said Monday.
This is not the first time Musk has commented on a potential recession. In 2021, Tesla’s CEO said he believed the next recession would come in the next two years.
– Elon Musk (@elonmusk) December 30, 2021
Musk is not an economist, but he is also not the first high-ranking official to raise the idea that a recession is looming. On Sunday, former Goldman Sachs CEO Lloyd Blankfein told CBS he believed there was a “very, very high” risk of recession. In April, Deutsche Bank economists predicted that the United States would hit a recession in 2023, citing inflation and higher interest rates.
The chairman of the US Federal Reserve, Jerome Powell, spoke out against fears that the economy could turn into a downturn after the Federal Reserve raised interest rates earlier this month. He told reporters that there was no indication that the economy was “close to or vulnerable to recession”. But on Thursday, Powell seemed to retire.
“Whether or not we can make a soft landing may actually depend on factors we don’t control,” he said, noting that Russia’s attack on Ukraine and ongoing supply chain problems could create additional problems.
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