First published at 01:54 UTC on May 19th, 2022.
Speaking via video link with the All-In Podcast crew, Elon Musk, the CEO of TESLA, on Monday, 16th May, said
“The obvious reason for inflation is that the government printed a zillion amount more money than it had.”
So, it’s like the government c…
MORE
Speaking via video link with the All-In Podcast crew, Elon Musk, the CEO of TESLA, on Monday, 16th May, said
“The obvious reason for inflation is that the government printed a zillion amount more money than it had.”
So, it’s like the government can’t just issue checks far in excess of revenue without there being inflation, you know, velocity of money held constant.
So unless something were to change with velocity of money
If the Federal Government writes checks, they never bounce. So that is effectively creation of more Dollars. And if there are more Dollars created then the increase in the goods and services outgrow the economy, then you have inflation – again, velocity of money held constant.
This is very basic. This is not super complicated.”
If the government could just issue massive amounts of money and deficits didn’t matter, then why don’t we just make the deficit 100 times bigger? The answer is, you can’t because it will basically turn the Dollar into something that is worthless.
And various countries have tried this experiment multiple times. It’s not like, I wonder what happens if this is done.
Have you seen Venezuela? Like the poor people of Venezuela have been just rode roughshod by their government.
So obviously, you can’t simply create money”
The true economy is the output of goods and services. It’s not money.
Money, or anything that you call money, is a way for us to conveniently exchange goods and services without having to engage in barter and to shift obligations in time. Those are the two reasons that you have money – this thing called money. It’s really a database. Money is an information system for labour allocation and for exchange of goods and services and for translating in time.
This extended quote comes from the interview from about 1 hour 16 minutes in. It’s not totally verbatim – I’ve tidied up the dialogue a bit.
LESS