Elon Musk Warns Recession Will Persist Until The Spring Of 2024

Elon Musk, the CEO of Tesla and SpaceX opinionated that the world could experience the most prolonged recession in history which would probably last until the spring of 2024. Although perceived as a reservation for the economy, Musk becomes the latest corporate giant to express concerns over the recession along with Goldman Sachs CEO David Solomon, JPMorgan Chase CEO Jamie Dimon, and Jeff Bezos, the Amazon founder. 

The comments were made in response to a tweet from Billy Markus, a co-creator of Dogecoin, who goes by the online alias Shibetoshi Nakamoto, who stated that the current coronavirus rates “are actually pretty low. I guess the only things we need to be concerned about right now are the approaching global recession and nuclear apocalypse.”

“It sure would be nice to have one year without a horrible global event,” Musk wrote back.

Musk was then asked by Tesla Owners Silicon Valley, a Twitter account with over half a million followers, how long he believed the recession would persist, to which he responded  “Just guessing, but probably until spring of ’24.”

Elon Musk Claims That The Current Global Recession Will Last Until The Spring Of 2024

If such a prediction hits the target, the United States GDP would be on track to contract for a period longer than the global financial crisis (18-month recession), which lasted from December 2007 to June 2009. On a similar note, the U.S. GDP is expected to rise by just 0.2% this year and 1.2% in 2023, according to the Federal Reserve.

The International Monetary Fund (IMF) has also expressed concern over the issue by publishing the fact that the rate of global GDP growth was 6% in 2021, but it is anticipated to slow to 3.2% this year and 2.7% in 2023.

With the exception of the 2008 financial crisis and the temporary decline during the early stages of the Covid epidemic, such a trend would represent the slowest rate of growth since 2001. 

A day before Musk’s tweet, Jeff Bezos, the founder of Amazon, warned that it is time to “batten down the hatches” in anticipation of choppy economic conditions.

That tweet was sent along with a video of Goldman Sachs CEO David Solomon saying in an interview with CNBC (“Squawk Box.”) that he believes there is a “good chance” that the United States will undergo a recession. 

“I think it’s a time to be cautious, and I think that if you’re running a risk-based business, it’s a time to think more cautiously about your risk box, your risk appetite. I think you have to expect that there’s more volatility on the horizon now. That doesn’t mean for sure that we have a really difficult economic scenario,” Solomon further added.

Jamie Dimon, the CEO of JPMorgan Chase, has also issued warnings about impending economic turmoil with a similar tone.

The cost of money, determined by policymakers at the world’s central banks, is a significant factor taken into account by investors. The U.S. Federal Reserve, the world’s largest central bank, had its foot on the gas pedal until recently, trying to delay the regular economic cycle downturn. 

According to the National Bureau of Economic Research (NBER), the government organization that determines the official start and end dates of a recession, the U.S. economy has shrunk only once since June 2009, for two brief months.

Returning to the richest man in the world, Musk’s remarks came simultaneously when Tesla shares had a difficult week as the automaker missed sales projections and issued a warning about a likely delivery shortage this year.

Despite these concerns, Elon Musk voiced greater trust in the American economy compared to the rest of the world. He also mentioned how the economy is being impacted by rising interest rates. 

“The U.S. actually is in — North America’s in pretty good health,” Musk quipped. “A little bit of that is raising interest rates more than they should, but I think they’ll eventually realize that and bring back down, I think.”