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.
Coffee the Christian way: Promised Grounds
“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.
Independent Journalism Is Dying
Ever since President Trump’s miraculous victory, we’ve heard an incessant drumbeat about how legacy media is dying. This is true. The people have awakened to the reality that they’re being lied to by the self-proclaimed “Arbiters of Truth” for the sake of political expediency, corporate self-protection, and globalist ambitions.
But even as independent journalism rises to fill the void left by legacy media, there is still a huge challenge. Those at the top of independent media like Joe Rogan, Dan Bongino, and Tucker Carlson are thriving and rightly so. They have earned their audience and the financial rewards that come from it. They’ve taken risks and worked hard to get to where they are.
For “the rest of us,” legacy media and their proxies are making it exceptionally difficult to survive, let alone thrive. They still have a stranglehold over the “fact checkers” who have a dramatic impact on readership and viewership. YouTube, Facebook, and Google still stifle us. The freer speech platforms like Rumble and 𝕏 can only reward so many of their popular content creators. For independent journalists on the outside looking in, our only recourse is to rely on affiliates and sponsors.
But even as it seems nearly impossible to make a living, there are blessings that should not be disregarded. By highlighting strong sponsors who share our America First worldview, we have been able to make lifelong connections and even a bit of revenue to help us along. This is why we enjoy symbiotic relationships with companies like MyPillow, Jase Medical, and Promised Grounds. We help them with our recommendations and they reward us with money when our audience buys from them.
The same can be said about our preparedness sponsor, Prepper All-Naturals. Their long-term storage beef has a 25-year shelf life and is made with one ingredient: All-American Beef.
Even our faith-driven precious metals sponsor helps us tremendously while also helping Americans protect their life’s savings. We are blessed to work with them.
Independent media is the future. In many ways, that future is already here. While the phrase, “the more the merrier,” does not apply to this business because there are still some bad actors in the independent media field, there are many great ones that do not get nearly enough attention. We hope to change that one content creator at a time.
Thank you and God Bless,
JD Rucker
