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(LifeSiteNews) — Tech mogul Elon Musk gave his thoughts on the ongoing banking crisis in the second installment of his interview with Fox News host Tucker Carlson, which aired Tuesday night. Musk said that ongoing inflation at least partially caused by the government pumping money into the economy during the COVID lockdowns is likely to get worse this year unless curbed by a reduction in the interest rates by the Federal Reserve.

“[T]here’s a serious danger with the global banking system,” the Tesla and SpaceX co-founder told Carlson in a far-ranging interview that partially aired on Monday and also touched on topics related to artificial intelligence and plummeting birth rates. 

“It’s not that the canary in the coal mine has died, but the miners are starting to die too,” Musk said. “Silicon Valley Bank collapsing overnight is one hell of a big canary. It’s more like a turkey. It’s not like some small fry thing.” 

Musk said that stimulus bills during the COVID-19 lockdowns weren’t “paid for,” but simply “generated more currency” into the economy. Unlike state governments or individuals, he said, the federal government has the power to essentially print more money, “and that’s what they did.” He pointed out that the federal government’s “checks always pass,” unless and until the government runs up against a debt limit, something he predicted is likely to happen “later this year.”

“As the old saying goes, there’s no free lunch,” he remarked.

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Musk also raised concerns about the real estate market, noting that the growing trend of work-from-home jobs which increased during the COVID lockdowns has drastically cut back the use of office buildings in the U.S. and worldwide.

“Commercial real estate used to be something that was a Grade A asset. That if a bank had commercial real estate holdings those would be considered the highest security… some of the safest assets you could have,” he explained. “Now, that is not the case anymore. One company after the other is canceling their leases or not renewing their leases. Or, if they go bankrupt, there’s nothing for the bank [that] owns that real estate to go after, cause they were a previously strong company and [are] now dead. What do you go after at that point?”

“So, we really haven’t seen the commercial real estate shoe drop. That’s more like an anvil, not a shoe,” he said, warning that “real estate portfolio degradation” is set to become a “very serious thing later this year in my view.”

Meanwhile, it’s not only commercial real estate that Musk thinks will be a problem for the banks, but housing as well.

According to Musk’s predictions, Americans will likely witness “a drop in house prices because the interest rates are too high.”

“So, if the fed rate is high and you have a high base interest rate, effectively the price you can pay for the house drops, because you now have to pay more interest, which means that if you’ve got a fixed monthly payment you can now afford to buy a house for less money. It effectively drops the prices of houses,” he said. 

According to the billionaire, “this is the kind of thing that tends to accelerate, so then you can get negative equity in the home market as well.” This, Musk said, will lead to banks suffering losses not only in their commercial real estate portfolios but in their mortgage portfolios as well.

“This is a dire situation,” he said, though he offered “a solution to mitigate the damage here.”

According to Musk, if the Federal Reserve were to lower the interest rates the problem could be resolved; however, the Fed has responded to the issue by upping the rates again.

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Last year, Politico reported that the U.S. central bank had raised rates nine times since 1961 in an effort to stem inflation; in eight of those instances, “a recession followed.” Moreover, a recent research paper tracked 16 central bank rate hikes since 1950 in the United States, Canada, Germany and the United Kingdom. In each of those cases, as ABC News pointed out, “a recession resulted.”

In his interview with Musk, Carlson suggested that the Fed is reluctant to lower the rates because the move would accelerate the rate of inflation, something that would be unpopular “in an election year.”

“Inflation is going to happen no matter what,” Musk responded. “If you increase the money supply, you get inflation. So, there’s no, there’s not some magical cure for getting rid of inflation, except to increase the productivity, the output of goods and services.”

He noted that if the “ratio” between money and goods and services is “constant,” the economy is secured against inflation. However, inflation is sure to occur when money is fed into the system faster than goods and services, as was done in the past several years in an effort to stem the financial bleeding occasioned by the economically disastrous COVID lockdowns.

“If you could just issue massive amounts of money without negative consequences, why don’t we just take that to the limit and make everyone a billionaire? Well, they tried that in Venezuela,” Musk said. “How’d that work out?” 

“They had to eat zoo animals,” Carlson remarked.