During an interview on Tuesday night, Elon Musk, the CEO of Twitter, expressed his concern that the United States could be facing significant financial problems later this year as a result of various factors.
Speaking to Fox News host Tucker Carlson, Musk pointed out that the collapse of major banking institutions such as Silicon Valley Bank could be a sign of serious conditions on the horizon for the US economy.
“We have a situation here where it’s not merely — it’s not that the canary in the coal mine has died, but the miners are starting to die, too,” he stated. “Silicon Valley Bank collapsing overnight is a one hell of a big canary. … I think that there is a serious danger with the global banking system.”
Musk opined that the pandemic-induced abandonment of commercial real estate properties could intensify the challenges faced by banks. Musk emphasized that these properties were once regarded as valuable hard assets for banks.
“So, we really haven’t seen the commercial real estate shoe drop,” he stated. “That’s more like anvil, not a shoe. The stuff we’ve seen thus far actually hasn’t even — it’s only slightly real estate portfolio degradation, that will become a very serious thing later this year in my view.”
Musk cautioned that inflation would worsen as the Fed was unlikely to reduce interest rates during an election year.
“Inflation is going to happen no matter what,” Musk added.
Musk criticized the U.S. federal government for passing COVID stimulus bills, saying they were not funded and worsened inflation.
“As old saying goes, there’s no free lunch,” he said. “So if you could just issue massive amounts of money without negative consequences, why don’t we just take that to the limit, make everyone a trillionaire? They tried that in Venezuela. How’d that work out?”