Why Cryptocurrency Holders Should Be Watching the Elon Musk and Tesla Crisis Very, Very Closely
Anyone that’s been watching the recent drama surrounding Tesla’s embattled CEO, Elon Musk, has probably been witnessing what will become one of the most famous corporate collapses in American history.
Where do we even begin? I guess we can begin by pointing out that short sellers are circling the company like vultures as allegations (including leaked data from internal whistle blowers) are claiming that the company is burning through cash and on the brink of bankruptcy, defective parts are being utilized in their production line (including punctured battery packs), direct orders from Musk to cut corners on critical breaking tests, as well as Tesla fabricating production numbers with “factory gated” cars.
Please note that all of these problems were plaguing Tesla before Elon Musk decided to “cross the Rubicon” by declaring on August 7th that he had secured funding to take the company private after its stock hit $420. The initial euphoria felt by Musk acolytes almost immediately disappeared once a growing realization began to set in that the tweet might have been an attempt by Musk to “crush the shorts” (in Musk’s own words) and silence Tesla’s critiques once and for all.
Since then, the SEC has decided to launch a formal investigation into the infamous Tweet, many of Tesla’s top investors have also launched lawsuits against the company, and it’s also becoming abundantly clear that Tesla’s Board had absolutely no idea that Musk was planning on taking the company private (or that he had approached investors and secured money to do so).
Even worse, Musk’s recent interview with the New York Times (where he came across as mentally and emotionally unbalanced) has caused Tesla’s stock to plummet nearly 10%, and in another bizarre chapter in this growing American scandal and soap opera, the American rapper Azaelia Banks (who was planning on collaborating with Musk’s girlfriend, the singer and songwriter known as Grimes (i.e. Claire Boucher)) also claims that she was at his house when he made the now infamous tweet about Tesla going private.
Not only does Banks claim that Musk was tripping on acid when he made the tweet, but that he also had a mental breakdown when he realized the enormity of his mistake (especially when recognizing that he hand’t secured any funding whatsoever). While Musk initially claimed that he had never met Banks, that she had never been at his house, and that he had no idea who she was, he then confessed that in fact she had stayed at his house on the invitation of his girlfriend.
Why should cryptocurrency holders care about any of this? Because there’s a good chance that Tesla is to Silicon Valley what Lehman Brothers was to the Wall Street Crash of 2008.
In case you weren’t aware of it, Silicon Valley has created a bubble that dwarfs the one that popped in 2000. Hundreds of “unicorn companies” that are overvalued by as much as 50% (and for whom any sane investor can recognize as ponzi schemes) have nonetheless been propped-up by drunken investment capital from venture capitalists, hedge funds, and mutual funds.
As I pointed out in another article, the collapse of this bubble will actually set off two economic bombs, not one. At this point, the stock market is being propped-up by the artificially-inflated FAANG economy (Facebook, Amazon, Apple, Netflix, and Google), and any collapse of the Silicon Valley bubble would devastate the markets, which in turn would devastate local, state, and federal pension programs who have also heavily invested into the sock market (and which are already underfunded by trillions of dollars).
I’ve always advocated that the cryptocurrency community should be incredibly cautious in their dealings with Silicon Valley. Being a new pillar of the global economy, we will naturally have our own growing pains, and while the market will naturally weed out the weaker coins, Silicon Valley has already made it abundantly clear that they view cryptos as a mortal threat, with companies like Facebook, Google, and Apple ferociously cracking down on cryptos in order to protect the supremacy of both their business models and fiat currencies.
Despite both of our communities be labeled as parts of the tech community, most of these companies are not our allies and do not like us, and while I write for Karatcoin, crypto enthusiasts should understand why many of these companies do not like us.
Crypto platforms such as Steemit and Oyster Pearl would completely devastate the advertising models that companies like Facebook and Google utilize to make a profit, and the inherent decentralization that the crypto economy advocates also threatens the “hand in glove” relationship many of these companies maintain towards national governments, central banks, as well as the fiat monetary system in general.
The recent targeting and crackdown on conservative commentators on platforms such as Google, Facebook, Twitter, and Spotify has also now extended to the targeting and banning of libertarian economists and commentators. This is an incredibly worrying development that the crypto community should be paying attention to, as libertarians have always been some of the strongest supporters, advocates, and pioneers for cryptocurrencies.
As things are shaping up, there’s a very good chance that Tesla represents the “unicorn of unicorns” in regards to the avalanche of funny money being used to prop-up hundreds of ponzi schemes in Silicon Valley, and if it finally implodes, you’re looking at a contagion that could incinerate everything in its path. The cryptocurrency community should be wise in remembering the founding objective of decentralization, and you should act neither stunned nor flabbergasted if crypto coins that have ignored this objective get burned when the market finally does implode.
Speaking for Karatcoin, we have correctly recognized that the global economy is about to go through both a revolution and a renaissance as the fiat monetary system continues to corrode and collapse. As such, we have seamlessly integrated the speed, liquidity, and technological advancements of cryptos with the trust, reliability, and anti-inflationary store of value that gold has offered investors for 2,700 years. For more information on our investment portfolio, please visit us at https://karatcoin.co/.
https://www.bloomberg.com/graphics/2018-tesla-burns-cash/
https://electrek.co/2018/08/15/tesla-whistleblower-saboteur-model-3-vin-punctured-battery-cells/
https://www.nytimes.com/2018/08/16/business/elon-musk-interview-tesla.html
https://www.cnbc.com/2018/05/22/tech-bubble-is-larger-than-in-2000-and-the-end-is-coming.html
