Elon Musk, the CEO of Tesla and Spacex, talked about the U.S. economy on the All-In podcast, published Monday.
Commenting on whether the U.S. economy is in a recession, Musk said:
We probably are in a recession and that recession will get worse but these things pass and then there will be boom times again … It‘ll probably be some tough going for, I don’t know, a year, maybe 12-18 months.
He added that 12 to 18 months is roughly the amount of time for a correction to happen. Recession fears have escalated recently as the Federal Reserve tightens monetary policy to help cool down inflation.
Musk explained that in his opinion, recessions are not necessarily a bad thing, emphasizing that hes been through a few of them in his time at public companies. “What tends to happen is, if you have a boom that goes on for too long, you get misallocation of capital — it starts raining money on fools, basically,” he described.
Noting that the rising prices resulted from money printing, the Tesla boss said:
The honest reason for inflation is that the government printed a zillion more money than it had … This is not like, you know, super complicated.
Musk added that countries like Venezuela had already been down the same path.
The Tesla executive is currently in the middle of a takeover bid to buy Twitter Inc. He offered the social media giant about $44 billion which Twitter has accepted. However, the deal is now on hold.
Musk has also indicated that he may seek a lower price for Twitter, stating that there could be at least four times more fake accounts than what the company has said. He opined: “You cant pay the same price for something that is much worse than they claimed.”