Elon Musk, founder of Tesla and SpaceXhas pointed out that both firms face a significant inflationary pressure in the face of the increase in raw materials and logistics as a consequence of the Russian Uranian crisis. He even said that it is more to own a house or shares, according to Allison Prang at The Wall Street Journal.
In addition, they also pointed out that they will not sell their holdings in cryptocurrencies as Bitcoin, Ethereum or Dogecoin.
Musk said in a tut on sunday that both the electric vehicle maker and the space exploration company “are experiencing significant recent inflationary pressure in raw materials and logistics.”
His comments come after government data released last week showed that consumer prices increased to one annual rate of 7.9% last month, the highest in four decades. And a separate survey by The Wall Street Journal showed that non-white voters were more likely to say that recent inflation is putting great financial strain on their lives.
“As a general principle, for those seeking advice from this thread, it is generally better to own physical things like a house or shares in companies that you think are good commodities than dollars when inflation is high,” Musk said on Twitter.
“I still have and will not sell my Bitcoin, Ethereum or Doge fwiw,” Musk added.
The value of bitcoin is tradable at a total of $39,000, according to CoinDesk. It is down about half from its all-time high in November.
The net worth Musk’s is from $206 billionaccording the Bloomberg Billionaires Index.
Musk’s comments on inflation come about because the Rising prices for energy, food, and utilities are the key components that drive inflation up. It is expected that the oil and commodity market disturbances in the wake of the Ukraine crisis will add further cost pressures in the coming months. The last time consumer prices were this high was in in 1982 during a recession.
Problems in all sectors
Inflation is felt from consumers to businesses. Depending on the financial data provider set of facts, over 350 S&P 500 companies they mentioned inflation during their earnings calls last quarter, the highest since at least 2010.
Musk’s comments also echoed the Tesla recent results. The company said higher logistics costs and material prices hurt profits last year.
Other companies have been feeling similar pressures, from soft drink maker Coke to the consumer products company Procter & Gamble.
“Inflationary and supply chain pressures continue to affect costs on several fronts of the business, including input costs, transportation, marketing and operating expenses,” said the Coca-Cola CFO John Murphyto analysts on the company’s fourth-quarter earnings call last month.
P&G, the maker of Pampers diapers and Tide laundry detergent, said it expected inflationary pressure to continue.
“Materials availability remains limited in some categories and in some markets, inflationary pressures are pervasive with little sign of easing in the near term,” he said. Andre Schulten, P&G CFOon the company’s second-quarter earnings call in January.
Tesla closed the Friday session at $795.35 and the location of the moving averages, the 70-period above the 200-period, would give us a bullish signal. Meanwhile, most Ei indicators are bearish.