A Little Conspiracy, Oil, Inflation and Everything

10 févr. 2021

Tesla bought Bitcoins for $1.5 billion to maximize profit from cash, as we wrote yesterday. Considering that buying Bitcoin at current prices is by no means a conservative risk-free investment. So, we have the following somewhat conspiracy theory. Musk desperately needs a Tesla’s profitability demonstration, which so far is present only formally on paper. If it weren’t for the regulatory loans sale, 2020 would’ve ended at a loss for Tesla—like ALL previous years. That is car production and sales cannot generate almost any profit. Perhaps one day the economies of scale would work, but so far the business has been unprofitable.

Considering how high Tesla shares have climbed, they will be able to stay at the top and continue to grow only on condition of stable positive financial results. So, the bitcoins purchase for $1.5 billion is very similar to the ‘all-in’ strategy by Musk. If Bitcoin goes off, you’ll get a speculative excess profit. Also, you can then brag it about as a profit for Tesla’s business. But if Bitcoin suddenly loses half of its value again, then Tesla is doomed to losses. But Musk will say that these aren’t business problems, but his failed investment idea. The business itself has nothing to do with it. Such a ‘win-win’ situation. The whole question is whether this multi-move will work. In our opinion, Musk started the most dangerous game, and since he started it, apparently there’d been reasons for that. After all, everyone isn’t at stake because of a good life.

Well, God bless Musk. At the end, maybe Tesla will really become an example for the whole world and Bitcoin will cease to be just a speculative toy and finally turn into something what it was originally conceived for.

According to the past month results, the oil market recorded the best January for itself over the past 30 years. We’ve already listed the reasons for this in our review yesterday. Today we note that so far for oil, everything continues to develop to the maximum. There are problems in Libya again, and judging by the API data, US oil reserves continue to decline.

But some analysts suggest thinking if it’s time to start worrying about this. Since November last year, oil prices have increased by 80%. And if you look from the minimum marks in the spring of 2020, then the growth is already measured in hundreds of percent. So much of a significant rise in oil prices is among the strongest inflationary drivers. The rise in inflation is a reason for the central banks to start tightening monetary policy. But this can already become a verdict for risky assets, in which bubbles have inflated everywhere and are just waiting for a reason to collapse. It’s possible that today’s CPI from the US will give a signal to the markets in this regard.