Elon Musk believes inflation has peaked but predicts a lengthy mild recession anyway
By: Michael Wilson
August 8, 2022 8:45 AM
Tesla CEO Elon Musk believes inflation has peaked already and the U.S. economy will be in a recession for around 18 months. “ We do get a fair bit of insight into where prices of stuff are going over time, ” the billionaire explained, opining that “ inflation is going to drop quickly. ”
Tesla and Spacex CEO Elon Musk recently shared his view on the U.S. economy, inflation, and recession during Tesla’s 2022 yearly meeting of stockholders on Thursday.
Replying to a question when quizzed about inflation, the Tesla CEO elucidated “ We do get a fair bit of insight into where prices of stuff are going over time because when you ’re making millions of cars, you have to buy commodities many months in advance of when they ’re required Because it’s a long supply chain with a tremendous amount of inertia, so we sort of have some insight into where prices will be heading to overtime.”
Musk elaborate “ The fascinating thing that we are observing right now is that most of our goods, most of the things that goes into a Tesla not all, but more than half of it — the prices are inclining down in six months, six months from today. ” He added
The trend is down which suggests that we're past peak inflation.
Still, Musk noted “ Making macroeconomic predictions is a approach for catastrophe but my guess is that we're past peak inflation and that we will have a recession. I suppose it'll be a fairly mild recession but I ’m just guessing then. ”
highlighting that his view is “ total speculation, ” he noted
Our guess is that it’s a mild recession for 18 months or something like that, would be my tidy guess right now.
Musk clarified saying “ We do not have the fundamental capital misallocations in the U.S. as we've had in the previous times, like routing up to 2008 where we were erecting primary casing units at twice the rate of household setup which obviously doesn’t make sense. A lot of companies were over-levered. ”
Musk wrapped up “ The leverage or liability that companies have right now is fairly low so I would say presumably, you know, mild, moderate recession, perhaps 18 months-ish, and I suppose inflation is going to drop rapidly. That’s my guess. ”
The Tesla CEO’s reflections during the shareholders ’ meeting sounded the tweets he made on July 28. He wrote at the moment “ Inflation might be inclining down further Tesla commodity prices are trending down than upward . ”
Musk began talking about the U.S. economy going into a recession a few months ago after revealing in March that both Tesla and Spacex observed expressive inflation pressure.
The Tesla Founder afterward said that a recession “ is actually a logical thing ” for the U.S. economy, adding “ It has been raining money on fools for a long time. Some bankruptcies need to occur. ”