Is Tesla’s stock a bubble? How the U.S Virtual Economy works

Here is a brief explanation of how the U.S virtual economy works, using Tesla’s stock as a case study. Tesla stock price is the product of the actions of the Fed and other central banks.

In 2020, more than $12 trillion was printed out of thin air. All this money has been injected into the monetary and financial system. Interest rates were lowered to zero.

Millions of savers were pushed into the stock market. All of them sought to buy big names in tech.

Tesla was the company that benefited the most from this TINA and FOMO effect. TINA means “There Is No Alternative” here. In one year, the company founded by Elon Musk has seen its market cap explode. Tesla now has a market cap of over $750 billion. It had even surpassed $800 billion at the very beginning of 2021.

This even allowed Elon Musk to become for a while the richest man in the world ahead of Jeff Bezos.

If Tesla is a bubble, you have to understand that this also applies to all Tech companies in the stock market. Sooner or later this bubble will burst, and Tesla’s share price will correct sharply.

It is only a matter of time. The prevailing optimism is far too great compared to the actual situation of the economy.