December 2, 2023


Complete Canadian News World

Elon Musk welcomes recession: 'Bankruptcy has to happen'

Elon Musk welcomes recession: ‘Bankruptcy has to happen’

Elon Musk thinks it will be good for The US economy is in recession and that “some bankruptcy has to happen”.

Tesla’s billionaire boss said the local economy is undergoing a “rude awakening”. He also said that working from home made Americans lazy.

When asked by a Twitter user if he thought there would be a recession, Musk replied, “Yes, but that’s actually a good thing. It’s been raining money on fools for a long time.”

Then he added, “Some bankruptcies have to happen. Plus, all the Covid tools that stay at home have fooled people into thinking you don’t need to work so hard.”

“Rude awakening inside!”

Musk was then asked how long he thinks the recession will last.

“Based on previous experience, about 12 to 18 months,” the tech mogul replied.

“Companies that are inherently negative cash flow (i.e. value destroyers) have to die, to stop consuming resources.”

Analysts have said in recent weeks that there is a higher risk that the US economy will fall into recession because of it stubbornly high inflation In addition to COVID-related disruptions in the supply chain.

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The federal government on Thursday released data indicating that gross domestic product, the broadest measure of goods and services produced across the economy, fell 1.5% in the first quarter of 2022.

The 1.5% contraction came in sharp contrast to the 6.9% growth in GDP reported in the last quarter of 2021.

Analysts said the result was due to strong US consumer spending on imports, which outpaced spending on exports.

Musk took to Twitter on Thursday and predicted that the US economy would be in a recession for at least a year.

In the absence of the trade imbalance, GDP would have been 3.2% higher.

The contraction was also attributed to a slowdown in the restocking of goods in warehouses and warehouses, which led to a decline of 1.1% of GDP.

The economy continues to be burdened by high levels of inflation, prompting analysts to raise the risks of a recession.

Consumer Price Index It rose 8.3% in April.

Earlier this month, the Federal Reserve issued a Increase the interest rate by half a point larger than usual Effectively increasing the cost of borrowing money in order to reduce spending.

Fed Chair Jerome Powell noted similar increases in June and July.