Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[2daMoon]

If 3/7ths of the USD money supply has been printed in 2020 alone, would the real inflation rate of USD fiat currency be 43% rather than the +-2% reported?

I don't think so. Watch the video I posted earlier this morning for a good explanation of how that works. What the FedRes provides for bank liquidity does not have an affect on the money in circulation. They are not connected.

People and businesses borrowing from banks is what produces inflation in the money supply we use to buy things. The 2% figure is accurate. When borrowing from banks is down, inflation is down.

 

[Christine69420]

A new video from WuWa and Giga Shanghai: Central Area Construction Progress\Tesla gigafactory 3

...has this exchange in the comments:

Andy Granger:
Happy Chinese New Year, Wuwa. By the way, which new building will be the R&D centre? Tom Zhu said this week it is under consruction at the factory.

WU WA:
Happy Chinese New Year,Andy Granger

Which neighbourhood are you referring to as an R&D centre? The battery R&D centre seems to be together with the charging pile factory, which is 6 km away from the factory. If it is the R&D centre of the whole Tesla Motors, at present, there are two large buildings under construction, one is located in the centre of the factory, and the other is the northeast site of the factory. The construction of Tesla's Shanghai factory has always been kept secret, and no exact information is available.

 

[Maarten]

Any investor concerned about a Central Bank's affect on the money supply, and upon stock prices, should watch this video. This is the best description of the mechanics of the behind-the-scenes workings of the banking system I have viewed.

TLDW: Fed "money printing" having a relationship with inflation is a misconception.
​

Ben Felix' channel on YouTube, Common Sense Investing, has other content that investors may find useful. Check it out.

I stand corrected.
That was very instructive indeed.
Feel a little bit better that I am among professors that were also wrong about this.
Still, it depends on the circumstances?

 

[jdw]

That's what a lot of people were saying in 2008 and 2009 and it didn't happen

In 2008 the increase in money supply was mostly replacing money that disappeared due to wall street shenanigans. This time it's financing government shenanigans.

 

[feigen66]

Money is just a token stored in the databases, and there are two types: centralized (Central Banks) vs discentralized (Ledgers). Not much choices left.

All the debate on the environmental ground is mooted since USD has been primary units of crude oil trades and its monetary policy has been the engine of wars. To maintain the value of USD, there was countless wars being waged. The value of USD, in essence, is largely backed by the consumption of oil.

The only reason that Tesla needs to invest its cash is to maintain the buying raw materials to accelerate its mission. Just look at how chip supply shortage disrupts the entire industry, it doesn't take much imagination to predict the impact of possible inflation, even by just a few percentage, to impact Tesla's operation.

If Tesla truly want to make money, it can jack up the price of solar roof and Model 3 but they didn't. It kept passing down the saving to customers.

Think about long terms. If you were Elon, what would you do to keep your supply chain alive to maintain 50% YoY growth to fund your mission?

You could be yeppie vegan, 99% environmental friendly by only breathing oxygen but you can't change the world this way. That's the reason all the EVs beforehand failed because they are just "environmental friendly".

 

[traxila]

All discussions of the money printing issues cannot ignore the current status of the USD as the reserve currency in the world.

Any arguments that draw on the effects in countries of past money printing should be focused on those that were the reserve currency at the time. Especially if the ultimate outcome was the loss of reserve currency status. These examples are hard to find....

 

[traxila]

That's what a lot of people were saying in 2008 and 2009 and it didn't happen

Aggregates matter. The actions the FED took in 2008 and 2008 were never fully reversed.

And here we are sitting at zero percent again for an indefinite period of time.

When money costs you zero percent you can borrow an infinite amount and not pay anything back at all. Just keep rolling over the principal. Would that common people had access to this type of accounting.

The question begs: does a zero percent interest policy ever have to end?

I am not smart enough for this question.

I can only fall back to truisms:

All things are temporary.

 

[MABMAB]

Woo hoo!

Conclusion? Still shareholders...

 

[mekberg]

Woo hoo!

Conclusion? Still shareholders...

I watched this the other day. They seem a bit spicy about how things went down- especially Martin.

 

[Nocturnal]

Money is just a token stored in the databases, and there are two types: centralized (Central Banks) vs discentralized (Ledgers). Not much choices left.

All the debate on the environmental ground is mooted since USD has been primary units of crude oil trades and its monetary policy has been the engine of wars. To maintain the value of USD, there was countless wars being waged. The value of USD, in essence, is largely backed by the consumption of oil.

The only reason that Tesla needs to invest its cash is to maintain the buying raw materials to accelerate its mission. Just look at how chip supply shortage disrupts the entire industry, it doesn't take much imagination to predict the impact of possible inflation, even by just a few percentage, to impact Tesla's operation.

If Tesla truly want to make money, it can jack up the price of solar roof and Model 3 but they didn't. It kept passing down the saving to customers.

Think about long terms. If you were Elon, what would you do to keep your supply chain alive to maintain 50% YoY growth to fund your mission?

You could be yeppie vegan, 99% environmental friendly by only breathing oxygen but you can't change the world this way. That's the reason all the EVs beforehand failed because they are just "environmental friendly".

And let's be real. Nobody on this forum can say jack about environmental costs. Sure we all care about it (or almost all of us) and are making changes but if we cared THAT much we wouldn't be driving cars, or taking vacations, or living in large homes. Glass houses and all that.

 

[Chunky Jr.]

The tweaks they made to Model 3 interior are now in the Fremont Ys

Tesla’s “Refreshed” version of the Model Y crossover is hitting U.S. showrooms. The 2021 version of the all-electric crossover is equipped with many of the same features as the Model 3 “Refresh” that was rolled out last year. After initial revisions were spotted in China, the new-and-improved interior arrived at U.S. showrooms.

Tesla Model Y with 'Refreshed' interior arrives at U.S. showrooms

 

[Krugerrand]

I watched this the other day. They seem a bit spicy about how things went down- especially Martin.

Yeah, I thought the same. Their idea - super. Thank you and congratulations. The problem was that neither could do what was required to grow the company into success. The world is littered with idea men and sadly lacking in get ‘er done men.

 

[Chunky Jr.]

Tesla to Build an Electric Vehicle Factory in Karnataka, India, Chief Minister BS Yediyurappa Says

Tesla will build an electric vehicle factory in Karnataka, Chief Minister BS Yediyurappa said today. The statement was a part of the list of benefits promised to Karnataka in the Union Budget. This is the first announcement that an American manufacturer will build a manufacturing facility in Karnataka.

Gaurav Gupta, Additional Chief Secretary, Commerce and Industries in Karnataka told The News Minute that the timeframe and manner in which Tesla will operate in India is yet to be decided.

 

[dl003]

Aggregates matter. The actions the FED took in 2008 and 2008 were never fully reversed.

And here we are sitting at zero percent again for an indefinite period of time.

When money costs you zero percent you can borrow an infinite amount and not pay anything back at all. Just keep rolling over the principal. Would that common people had access to this type of accounting.

The question begs: does a zero percent interest policy ever have to end?

I am not smart enough for this question.

I can only fall back to truisms:

All things are temporary.

I believe it's not the borrowing but the utilization that is going to make or break us. For example: AAPL has $90B of liabilities, more than a fair number of SP 500 companies' market cap combined. Yet, AAPL is a money making machine and its debts are deemed top grade. If the money the government borrowed can be utilized to generate a better return both socially and financially, then we will be expanding our assets along with our liabilities. If not, we're doomed either way. That's why Biden's infrastructure plan is so important. If it creates jobs and puts the US on a successful trajectory, things will work themselves out or we'll at least be able to kick the can down a very long road. If the economy soars, more money will be needed to finance all the new activities and quantitative tightening might not be as severe as we think. If not, then inflation will remain low and we'll keep printing. As you can see, no matter what happens in the real world, the ability to self-reassure is key to good mental health.

 

[Creekstalker]

I stand corrected.
That was very instructive indeed.
Feel a little bit better that I am among professors that were also wrong about this.

That was a good explanation of Modern Monetary Theory and thanks for 2daMoon for sharing. I'm going to seek out a few more sources on this because much of what he says flies in the face of traditional monetary theory. My Spidey Sense was tingling at various points of the video but I had an equal number of "Hmmm, never thought of it that way..." moments. Definitely need to rewatch though. When somebody begins their message with "What you've been taught for generations is wrong" it makes me a little skeptical. Especially in this case, coming from a stock portfolio manager, whose interests are served by having the public unconcerned about negative implications of M1 expansion.

Anyways, thanks for the food for thought on a boring rainy Saturday. I like the way this guy explains things even though I'm gonna need some more convincing that there isn't an inflationary reckoning somewhere in our future. Cheers to all and thanks for sharing.

P.S. Similarly, Dave Lee's interview with the Bitcoin Investor (Dan Held, I think) provoked a similar reaction. Both are great jumping off points on topics I don't quite grasp.

 

[traxila]

I believe it's not the borrowing but the utilization that is going to make or break us. For example: AAPL has $90B of liabilities, more than a fair number of SP 500 companies' market cap combined. Yet, AAPL is a money making machine and its debts are deemed top grade. If the money the government borrowed can be utilized to generate a better return both socially and financially, then we will be expanding our assets along with our liabilities. If not, we're doomed either way. That's why Biden's infrastructure plan is so important. If it creates jobs and puts the US on a successful trajectory, things will work themselves out or we'll at least be able to kick the can down a very long road. If the economy soars, more money will be needed to finance all the new activities and quantitative tightening might not be as severe as we think. If not, then inflation will remain low and we'll keep printing. As you can see, no matter what happens in the real world, the ability to self-reassure is key to good mental health.

I agree. The key to future prosperity is wise investment. Our national policy on this has been a failure for decades.

A cutting edge 21st century renewable energy infrastructure can unleash a boom the likes of which has never been witnessed by current generations.

The only obstacle for the US to overcome is lack of political will.

 

[traxila]

And let's be real. Nobody on this forum can say jack about environmental costs. Sure we all care about it (or almost all of us) and are making changes but if we cared THAT much we wouldn't be driving cars, or taking vacations, or living in large homes. Glass houses and all that.

You are correct. Humans leave a hell of a mark. You keep tripping over their crap from thousands of years ago.

Conservation is important and has its place, but the only way out of here is cheap nearly limitless energy and technologies to cure our ills. No one wants to hear they need to live in a closet and ride a bike to not be hypocrites to the idea of sustainability. In fact, a large part of the population would rather engage in violence to prevent this, future be damned. As in, life is not worth living under such constraints. They have not been properly domesticated.

TANSTAAFL for sure. But perhaps we can allow the Sun to pay the price for a while and live large off its irresponsible behavior.

 

[traxila]

Tesla to Build an Electric Vehicle Factory in Karnataka, India, Chief Minister BS Yediyurappa Says

Tesla will build an electric vehicle factory in Karnataka, Chief Minister BS Yediyurappa said today. The statement was a part of the list of benefits promised to Karnataka in the Union Budget. This is the first announcement that an American manufacturer will build a manufacturing facility in Karnataka.

Gaurav Gupta, Additional Chief Secretary, Commerce and Industries in Karnataka told The News Minute that the timeframe and manner in which Tesla will operate in India is yet to be decided.

Perhaps this is the reason for our late day Friday boom?

Huge news for me. Will the market agree?

 

[Unpilot]

beer is not an option

Got to disagree with this.
Any rational thinker knows Beer is while not the only option....it is a necessary staple of all life.

 

[UncaNed]

Personally I find the noncommitment to a hard 2021 target extremely bullish for TSLA. We all know 2021 is going to be a huge year for TSLA with 2 GF going live and more than a few new model ramps. I can't even begin to imagine the work and brain power it is going to take to execute the plan. One must then raise the question if it is worth it to spend the time to manage WS's expectation. No. They didn't take TSLA seriously when it said it will deliver 500k in 2020. That's why they were scrambling to catch up with PTs. Why would this time be any different? Let WS do its things and focus on your job. That's what I want to see from the management. It shows they are laser focused on execution. Lay it all out at the beginning. If you wanna sell, sell and go away. TSLA doesn't need the hype and drama around the stock price to cause distraction to its workers.
Bottom line is know your management team. If you don't think they are going to work extremely hard with every fiber in their body to create long term value for investors, then sell and go away. What they communicate to WS is irrelevant. Gary Black is acting like Elon Musk suddenly stopped being Elon Musk, hence the reason for the soft guidance. I feel sorry for people who are selling because they prefer hype over execution and instant gratification over doing the necessary work to understand TSLA.

2021 will be great. I wonder how many instances of inexplicable SP rises we'll see?

But it looks to me like those new factory's production scaling up early 2022 will be when the rocket really takes off again.