Elon Musk, CEO of Spacex and Tesla has disclosed that both his companies face significant inflation in logistics and raw materials. Although he encouraged people to have physical items when inflation is high, he stressed that cryptocurrencies such as bitcoin, ether and dogecoin will not be sold.
Elon Musk Talks About High Inflation
Elon Musk (CEO of Tesla and Spacex) discussed inflation in series of tweets which began Sunday night. He began by asking his 7.7 million Twitter followers, “What are your thoughts about probable inflation rate over next few years?” Musk also revealed that his companies, Tesla and Spacex, are seeing significant inflation pressure in raw materials and logistics.
Spacex’s boss pointed out that similar trends are being observed by other companies. He referenced an article published by the Financial Times earlier this month stating that global commodity prices are on track for the biggest weekly rally in more than 50 years as Europe’s natural gas prices have hit a new record.
Dominic O’Kane, an analyst at global investment bank JPMorgan, was quoted by the publication as saying: “Events in Russia and Ukraine are unleashing exceptional commodity price moves, which could have structural implications on long-term supply . . . but we also believe there are credible threats of demand destruction as commodity prices melt-up.”
Many people replied to Musk’s tweets about inflation. Orcam Group founder Cullen Roche detailed: “The probability of 10%+ inflation is extremely high for much of 2022. Interestingly, this also increases the risk of deflation in 2023 & 2024 as it increases the risk of the Fed making a policy mistake and/or prices correcting by crashing.”
Last week, Charlie Bilello, founder of Compound Capital Advisors, noted: “The U.S. inflation rate rises to 7.9%, its highest level since 1982. Core inflation (excludes food/energy) rises to 6.4%, also the highest we’ve seen since 1982.”
Elon Musk’s Inflation Advice and Cryptocurrencies
Michael Saylor (pro-bitcoin) was one of those to respond to Musk. He tweeted:
USD consumer inflation and asset inflation will both continue at their highest levels. Weaker currencies will collapse, and the flight of capital from cash, debt, & value stocks to scarce property like bitcoin will intensify.
Musk was not surprised by Saylor’s conclusion. “It is not entirely unpredictable that you would reach that conclusion,” he replied. The Spacex boss proceeded to advise that as a general principle, “it is generally better to own physical things like a home or stock in companies you think make good products than dollars when inflation is high.”
Tesla’s technoking also confirmed that three of his cryptocurrencies are still his and that he will not be selling them. “I still own & won’t sell my bitcoin, ethereum or doge,” Musk wrote.
Last June, he revealed that he owned BTC, ETH and DOGE. Spacex is also his sole owner of BTC. Tesla stated in an SEC filing that Spacex only owns bitcoins.
On Monday, Musk also tweeted challenging Russian President Vladamir Putin to “single combat.” He said the “stakes are Ukraine.” He followed up with another tweet less than an hour later, asking the Kremlin: “Do you agree to this fight?”
Spacex’s CEO, Mykhailo Fedorov, has shipped a few Starlink equipment shipments to Ukraine. “Starlink keeps our cities connected and emergency services saving lives,” said Mykhailo Fedorov, the Ukrainian vice prime minister.
What do you think about Elon Musk’s comments? Please comment below.
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