well folks elon musk just said a recession is around the corner let's analyze what elon musk just said why what could possibly convince him to suggest that the recession is right around the corner and then let's look at some market data to see is recession potentially right around the corner well let's take a look at this okay first things first here's the twitter stream so uh somebody asked there are three and NUMBER_TOKEN startups valued at more than one billion dollars in the world today what do you think this chart looks like in say five years in other words how many of these companies are going to be bankrupt or xed off this list because they're not worth a billion dollars anymore or just went out of business elon musk says if history is any guide not many will make it past the next recession and remember elon musk mentions that other than ford the only us automaker not to go bankrupt and get to production is tesla it means the other automakers went bankrupt at some point or just don't exist anymore anyway so i mean obviously historically we know that like companies eventually they have a life cycle they go bankrupt does anybody remember sears sears built a home that i bought it was a kit home it was crazy anyway i have a video on that but anyway look at this then somebody naturally says when do you think the next recession will be and elon musk replies with predicting macroeconomics is challenging to say the least my gut feel is maybe around the spring or summer of NUMBER_TOKEN but not later than NUMBER_TOKEN so in other words folks elon musk says within the next NUMBER_TOKEN months we will probably see a recession according to his gut feeling now of course i had to follow up with not only mentioning that this video was brought to you by moomoo linked down below which we'll talk more about them in a bit but will the recession be transitory to which of course elon has not yet responded but let's try to understand where elon's head is so first he prefaces by saying that he's not really good at predicting macro uh and that this is just his gut feeling and so i was thinking about okay why might there be a recession uh well there there are two potential reasons there's the kathy wood reason which is if we see rampant deflation uh and at the same time as we see rampant deflation we could raise rates we could end up flattening the yield curve the yield curve could invert which signals a recession around the corner and boom we could go to recession so in other words if we get inflation that goes down too fast we and yet the federal reserve at the same time is too aggressive we could dampen economic growth for two quarters boom we're in recession that's all it takes two quarters of negative growth you're in recession right alternatively inflation could be so elevated that it continues to go up that supply chain issues continue to be an issue that inflation actually continues to run hot while the fed raises rates this reduces spending and gdp growth to a potential negative territory because now it's so expensive to spend money and people don't have money left there's no more free money floating around the stimulus regime is over and then what happens we go to recession for exactly the opposite reason which is too much inflation
START_SPONSOR_TOKEN follow up with not only mentioning that this video was brought to you by moomoo linked down below which we'll talk more about them in a bit END_SPONSOR_TOKEN