Elon Musk, the world’s richest man, spoke out about the current global meltdown on Friday, saying that the downturn is actually a good thing. The Tesla CEO also predicted that the current global recession could last up to 18 months.
Musk’s response was in response to a Twitter user who asked if he believes we are on the verge of a recession. The billionaire said yes, but added that it was a “good thing.” Musk explained his reasoning, saying, “It has been raining money on fools for too long.” Some bankruptcies need to happen.”
Also, all of the Covid stay-at-home stuff has led people to believe that you don’t need to work hard. The Tesla CEO warned of a rude awakening.
Yes, but this is actually a good thing. It has been raining money on fools for too long. Some bankruptcies need to happen.
Also, all the Covid stay-at-home stuff has tricked people into thinking that you don’t actually need to work hard. Rude awakening inbound!
— Elon Musk (@elonmusk) May 27, 2022
Musk’s latest remarks came as World Bank chief David Malpass warned that Russia’s ongoing invasion of Ukraine could trigger a global recession as food, energy, and fertilizer prices skyrocket. Furthermore, there are growing concerns about a recession, as the latest data released on May 18 showed that inflation in the UK economy has reached a 40-year high of 9%.
Meanwhile, the World Bank cut its global economic growth forecast for this year by nearly a full percentage point last month, to 3.2%. Fertilizer, food, and energy shortages are also affecting developing countries.
A recession is a business cycle contraction that occurs when there is a general decline in economic activity. Recessions typically occur when there is a significant decrease in spending (an adverse demand shock). A economic crisis, an external trade shock, an adverse demand shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster may all trigger this (e.g. a pandemic). It is defined in the United States as a significant decline in economic activity across the market that lasts more than a few months and is typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. In the United Kingdom, it is defined as two consecutive quarters of negative economic growth.