Tesla CEO thinks it’s time for “some bankruptcies” and warned that staying home during the pandemic led people to believe that it is not necessary to work hard
FILE PHOTO: Elon Musk looks at his mobile phone in Cape Canaveral, Florida, United States, January 19, 2020. REUTERS/Joe Skippe
Tesla CEO Elon Musk said that the looming recession in the United States is “actually a good thing”, a necessary “rude awakening” after the COVID-19 pandemic.
A user of Twitter asked Musk if he still believes that the North American country is approaching a recession, to which the businessman replied yes. “But it’s actually a good thing. She’s been pouring in money for far too long. There needs to be some bankruptcies,” said the billionaire who recently announced the acquisition of Twitter.
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“Also, the whole stay home for COVID has tricked people into thinking hard work isn’t really necessary. Rude awakening on the way!” Musk added.
Another Twitter user asked him how long the recession would last.
Elon Musk, founder of SpaceX and CEO of Tesla Inc. (Photo Bloomberg)
“Based on past experience, between 12 and 18 months. Companies that are inherently cash flow negative (that is, value destroyers) need to die, so that they stop consuming resources”, replied the businessman.
BlackRock< /i>, the world’s largest asset manager, warned this week that the US Federal Reserve’s move to raise interest rates to offset record inflation could trigger a recession.
“The Fed’s hawkish pivot has increased the risk that markets will see rates remain in tightening territory,” BlackRock said, according to Fox News . “The sell off so far this year partly reflects this, although we don’t see a clear catalyst for a rebound. If they raise interest rates too much, they risk triggering a recession. If they don’t adjust them enough, the risk becomes runaway inflation. It’s hard to see a perfect result,” the company said.