A look back at the macro context of the month of May and the adventures of Elon Musk.
The macro context for the month of May
This month, US inflation figures came out much more alarming than expected at 4.2% on an annual basis against 3.6% expected. L’inflation «core» (excluding energy and food) spring to 0.9% in the month of April alone, and 3% on the 12 recent months while the consensus was waiting 0.3% and 2.3% respectively. This is data likely to cause concern about the continued support of the FED, even if several officials have come in recent days to reiterate the position of the central bank according to which the rise in prices is temporary and can be countered without jeopardizing the economic recovery. In fact, the rate of Treasury Bills at 10 years remains under the 1.60%: an indicator to watch like milk on the fire.
Elon Musk in bitcoin country
Otherwise, let's stop for a moment on the adventures of Elon Musk in the land of bitcoin. Let's summarize. Early February, Elon Musk announces that he has purchased for 1.5 billion dollars of bitcoins to Tesla (the shareholders must have appreciated…) and accept payment for your cars with this cryptocurrency.
A to mi-mai, he brutally announced that he was now refusing bitcoin payments due to environmental risks. This already requires an explanation.:
Bitcoin is a “virtual currency secured by complex algorithms which consists of solving increasingly complicated equations” (sic). In remuneration for this security work, the speakers, called “minors”, receive new bitcoins. The rise in price making interest in “mining” more and more attractive, the number of miners has multiplied while using increasingly powerful and energy-intensive equipment: “mining farms” made up of hundreds of networked machines run 24 hours a day 24, ideally in China (65% bitcoin mining) where the cost of coal energy is low. This is how bitcoin consumes as much electricity per year as a country like Sweden (!) while polluting like no other.
SO, backtracking, Has Elon Musk become the spokesperson for environmentalists?? Not really. Actually, by participating in the bitcoin market which uses massive amounts of fossil fuels, Tesla takes the risk of being excluded from the American electric automobile subsidy program: billions of dollars in shortfall… And that’s the irony of the story: by participating in a currency that seeks to free itself from countries and states, Elon Musk was overtaken by the realism of public subsidies...
Waiting, what could push everyone to buy bitcoins where Elon Musk seems to make rain or shine with tweets?? Only answer that comes to mind: the lure of gain! Resell more expensive something that represents nothing more than wind. And that’s excellent news.: as long as there is greed, there will be volatility, and therefore opportunities. Gordon Gekko is not dead: «greed is good»!