Elon Musk has raised alarms about the direction of the U.S. economy, predicting that unchecked government spending could lead to bankruptcy.
He took to X (formerly Twitter) to criticize the government’s financial policies, pointing to a projected $16 trillion addition to the national deficit by 2035. Musk argues that this level of overspending is a key driver of inflation and threatens the country’s economic stability.
His concerns come as new data from the Commerce Department shows that inflation remains stable, with the Personal Consumption Expenditures (PCE) index holding at 2.5% in July. Despite this, the nation’s debt has surged to $35.27 trillion, fueling ongoing worries about the long-term health of the economy.
Musk’s warning arrives at a time of uncertainty in global markets, particularly as the Federal Reserve weighs future interest rate cuts. While inflation appears under control for now, the growing national debt casts a shadow over any economic optimism.
Bitcoin, often seen as a hedge against inflation, briefly surged past $59,000 following the release of the PCE data, although concerns about debt soon cooled the rally. Some analysts believe that Bitcoin could gain more traction as a safe haven, especially if fears over inflation and fiscal policy persist.
Adding to the intrigue, Musk recently won a legal battle over allegations that he and Tesla manipulated the price of Dogecoin. A federal judge dismissed the case, citing insufficient evidence that Musk or Tesla engaged in fraudulent activities related to the cryptocurrency.
BNY Mellon, the largest custodian bank in the U.S., has reportedly secured an exemption from the SEC’s Accounting Bulletin 121 for its institutional crypto custody operations.
Charles Hoskinson, co-founder of Cardano and Ethereum, has raised concerns about how former President Donald Trump and Vice President Kamala Harris approach cryptocurrency policy.
The Bank of Canada has announced that it is winding down its efforts on retail central bank digital currency (CBDC), as per an update on its website.
Circle is preparing for its initial public offering (IPO) and is set to relocate its headquarters to Wall Street in 2025, according to CEO Jeremy Allaire.