Elon Musk, the billionaire head of Tesla, Space X, and Twitter, on Thursday predicted a “serious recession” in 2023 and promised not to sell Tesla stock next year “under any circumstances.”
Speaking in a Twitter Spaces audio forum, Musk also assured investors Tesla hadn’t “skipped a beat on execution” since he took over Twitter. Twitter required an initial period of intense focus to get its “insane … costs under control” to stop it from going “flat bankrupt” next year, Musk said.
“I was still doing Tesla work during that time as well, by the way. And I think really Tesla has really not skipped a beat on execution,” he said. “The Tesla team is doing an incredible job across the board in execution.”
Tesla share prices fell further on Thursday over concerns about slowing demand for electric vehicles. Musk’s stock sales and focus on Twitter have also been blamed as a contributing factor, but Musk rejected this on Thursday, blaming the Federal Reserve’s interest rate increases.
‘Won’t Sell Stock’
Musk sold around 22 million Tesla shares between Dec. 12 and 14, valued at roughly $3.6 billion, according to a Securities and Exchange Commission filing. He has sold around $23 billion in Tesla shares since April, with much of the funds going toward his $44 billion acquisition of Twitter.
On Thursday, he promised not to sell any more stocks for the next two years.
“You have my commitment that I won’t sell stock until, I don’t know, probably two years from now. Definitely not next year under any circumstances and probably not the year thereafter,” Musk said.
Musk said he needed to sell some of his stock “to make sure, like, there’s powder dry … to account for a worst-case scenario.” The phrase “powder dry” means to always be prepared to take action yourself. Musk has previously made promises about not selling Tesla stock before subsequently selling it.
Less Focus on Twitter
Once he gets “the engine of engineering at Twitter” humming to ensure the social network can develop new features, Musk expects the social network to take up far less of his focus.
“In the grand scheme of things, the amount of cognitive load that Twitter represents is low. I mean, it is a much simpler problem than Tesla or SpaceX, obviously, by a hundred miles,” Musk said.
“I’d say it was a high cognitive load for about a month. At this point, it is a moderate cognitive load. A month from now, it’ll be, I think, low,” he continued.
“And if I look back and say, like: ‘What are actions I could have taken? Was there something that I failed to do at Tesla that could have been done and would have improved our execution?’ I literally can not think of a single thing.”
Musk noted that he hadn’t missed a single important meeting at Tesla since taking over Twitter, with both primarily based in the Bay Area of San Francisco.
‘Serious Recession’
The real issue is not how much time Musk might be putting into Twitter versus Tesla; according to the billionaire, it is the Federal Reserve’s “radical interest rate changes” pushing up the price of cars. Musk predicted a “serious recession” next year “comparable to 2009,” with decreasing demand for big-ticket items like vehicles.
With respect to global demand for vehicles, Musk said that interest rate rises push up the costs of both new and used cars, which he noted are mostly bought with leases and loans. He said a decrease in car demand, along with the Fed’s rate increases pushing up the cost of a car, creates a “double whammy.”
“So now you have structural demand, which is obviously going to be lower in a recession, and you’ve amplified the effect of cost of a car because they’re almost all bought with debt, so you get a double whammy, is what I’m saying,” he said.
Policymakers at the Federal Reserve voted at their last monetary policy meeting on Dec. 14 to hike the benchmark federal funds rate by 50 basis points to a target range of 4.25–4.5 percent, the highest level since late 2007. It was the seventh consecutive rise since March, totaling 425 basis points.
Fed Chair Jerome Powell said at a press conference after the meeting that the fight against inflation has a long way to go. Most officials expect rates to rise over 5 percent next year, which is more than originally predicted.
“I wouldn’t see us considering rate cuts until the committee is confident that inflation is moving down to 2 percent in a sustained way,” Powell said.
‘Hard Landing’
Musk rejected the idea that his political tweets are having an impact on Tesla share prices, contending that automotive demand is “problematic almost anywhere in the world” and “not everywhere cares about my political comments.”
“I really just don’t think this is a significant factor,” he said.
In Musk’s opinion, the U.S. economy is already in a period of deflation, and the Fed’s predictions are based on old data.
“The thing that I think most people don’t realize is how—I sound like a broken record on this—how big of an impact the Fed rate level is, at over 5 percent, if we are in a deflationary environment, which I think we are in,” he said.
“Objectively, we are,” he added.
Musk said it was “blowing my mind” that the Fed has raised rates to their current level, and said he believes that they are “dealing with old information.”
“The economy right now is like a car driving around on a cliffside road, and the Fed is driving it by looking out the rearview mirror,” he said. “In fact, it’s not even looking out the rearview mirror. It’s looking at a video taken out of the rearview mirror that’s like three months old. So obviously, this is not a good way to drive a car on a windy road.”
The Epoch Times has contacted the Federal Reserve for comment.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
