On the last day of 2021, Tesla CEO Musk expressed a relatively pessimistic view of the economic situation in 2022. Musk said he thinks there will be a financial crisis this year, timing in the spring or summer, but no later than 2023. Musk himself bluntly pointed out that predicting the economic situation is very difficult, but did not give the reasons and details of why he thinks there will be a financial crisis this year.
Musk has been selling his U.S. stocks since the second half of 2021, including his Own Tesla stocks, and Musk, who was once seen by investors as deliberately cashing out panic at a high level, said on the last day of 2021 that this year is 2022, which will be a financial crisis, so for us ordinary people, is it possible for Musk's prediction to become a reality?
Before we get to this topic, we'll take a look at what other financial giants on Wall Street have in the U.S. in 2021. First, according to Buffett's third-quarter financial report, the proportion of cash held by the stock god has reached a record level. As of the third quarter of 2021, Buffett had more than $145 billion in cash, which was converted into 920 billion yuan at the current exchange rate. Last year, Bill Gates, the world's richest man, also divorced his ex-wife. He is a Wall Street financial magnate who, in his 90s, could legally divide their stock holdings when he divorced his ex-wife. The Morgan family also claimed that their cash flow holdings exceeded $500 billion in the first half of last year alone.
Since last year, these Wall Street financial giants have begun to sneak off their HOLDINGs of U.S. stocks and continue to accumulate cash flow. According to the logic of ordinary people's thinking, the US dollar is currently in the trend of infinitely trying to ease monetary policy, and hoarding such a huge amount of money to wait for the purchasing power to decline is a very irrational investment behavior, why these Wall Street financial institutions have been hoarding cash last year?
The dollar is indeed at an all-time high and may be very high, but from the current situation, the Fed has not completely withdrawn from QE, but due to the outbreak of the Omicron variant in the United States a few days before Christmas, and the new single-day cases in the United States have already broken out in the United States, and the new single-day new cases in the United States have reached their highest point. This situation is reminiscent of the Fed's vows before Christmas to raise interest rates at least three times by 2022.
In general, the Fed's rate hike cycle is fixed, basically once every decade, and so far, the last rate hike cycle is only five years, in fact, domestic inflation in the United States has reached an all-time high in four decades, the inflation index reached 6.8% in November, if inflation continues to rise, it will be more than 10% double inflation caused by the decoupling of the dollar from gold in the 70s.
So, looking back, we have to ask, if the coronavirus outbreak in the United States continues to worsen, will the Fed be able to effectively exit QE monetary policy and implement a cycle of interest rate hikes? Raising interest rates is, to some extent, puncturing the bubble, and does the United States still have the courage now? If it does exist, then in the short term, for the US stock market and the real estate investment market, it is tantamount to a financial crisis, and Musk's view is correct.
Otherwise, or the rise in interest rates is small, the dollar will not return to the United States anytime soon, and the dollar decline will slow, but the large cycle will continue. So far, there is no last-minute basis for judging success or failure, and wall Street's financial giants have begun to guard against the risk of US stocks at the last minute.
But whether this year can form a financial crisis as Musk predicted, it will take time to answer. In today's critical period when the world has not encountered major changes in a hundred years, the repeated impact of the new crown pneumonia epidemic on the original industrial chain and supply chain, in 2022, some industries in the world will be reshuffled, but will it cause a financial crisis that swept the world like in 2008? No conclusions can be drawn at this time.