No, this is not the title of a 1950’s low-budget sci-fi flick. Nor is it a cheap commercial from the, er, 1950s comparing what someone is advertising with “Brand X.” No, it’s just some commentary about the proposed IPO — that’s “Initial Public Offering” for those of us not up on the lingo of financial markets — of “SpaceX” for “Space Exploration Technologies Corporation,” the rather unimaginatively named private American aerospace manufacturer and space transportation company.
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| This is NOT an all-powerful space alien |
Elon Musk founded the company in 2002 to reduce space transportation costs (how do you reduce the costs of something that isn’t happening?) and enable the colonization of Mars (Captain John Carter and Lieutenant Gulliver Jones move over). SpaceX is known for developing the reusable Falcon 9 rocket, the “Dragon” (Dracula?) spacecraft, and the Starlink satellite internet service.
We are looking at SpaceX today because of Musk’s recent announcement that his company is going to be making the biggest IPO in history (to date) sometime prior to Musk’s birthday on June 28, 2026 — a way of giving himself a $75 billion gift by selling that amount of newly issued (and possibly overvalued) SpaceX shares to investors. This dwarfs the previous records set in 2014 by the Alibaba Group ($25 billion) and in 2019 by Saudi Aramco (29.4 billion).
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| THIS is an all-powerful space alien |
Naturally, we wondered what effect something like the SpaceX IPO might have on the chances of adopting the Economic Democracy Act (EDA). This being the Age of AIquarius, the first thing we did was ask AI for its take on the situation and whether Musk’s Mega Market Monster X could cause a stock market crash.
AI “replied” (and we didn’t check the alleged facts, but they sound okay) that the SpaceX IPO is unlikely to cause a total market crash. Not total. And unlikely. These are not comforting words coming from a fake intelligence that might be sucking up to its purported god.
Then came some less comforting “however.” As the AI continued, “but its immense projected valuation ($1.5T–$1.75T) could cause significant, temporary disruption. It is expected to create a ‘liquidity vacuum,’ siphoning cash away from other stocks, particularly in the space sector, to fund a record-breaking amount of cash.”
In other words, at a time when the primary, productive market is already having trouble obtaining credit because gigantic amounts of the money created by the federal government allegedly for the primary market have already been siphoned off into the secondary, non-productive and speculative market, Musk proposes to drain the secondary market of liquidity, $75 billion worth, hoping eventually to pump up the value of SpaceX to $1.75 trillion.
So, what could possibly go wrong? How about “everything”? As AI went on to list the potential effects on the market:
· “Sucking Oxygen” from the Market: Due to its massive scale, investors may sell other holdings to buy into SpaceX, creating selling pressure elsewhere.
· Space Sector Realignment: While boosting other space-focused stocks in the short term, it could lead to a broader “uglier” revaluation where other companies are deemed less valuable by comparison.
· The “Musk Effect”: Given the volatility often associated with Elon Musk-led firms, especially with a potential lack of traditional lockup periods, intense, erratic, or speculative volatility is expected.
· Massive Capital Inflow: It is expected to be the largest IPO in history, aiming for a value up to $1.75 trillion, which would make it a Top-10 company, attracting enormous institutional attention.
· Retail Demand: There is high demand from “tourist investors,” with reports suggesting a potential 30% allocation for small investors, which could drive retail-led volatility.
While some observers warn of the risks associated with such high valuations, most views suggest the IPO will be a major, transformative event that alters the market landscape rather than causing a systemic failure.
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| "Tourist Investors" |
Before asking AI for its “opinion,” we had already thought of most of these; we hadn’t considered the “tourist investor” demand or the “Musk Effect.” Of the two, the latter is by far the more dangerous. A small company can afford to experience “lack of traditional lockup periods, intense, erratic, or speculative volatility” and sink or swim without dragging other companies or the entire market down with it . . . but SpaceX is so huge, and the single transaction is so immense that it can’t help but affect the entire economy if even the slightest thing goes wrong . . . and Musk is not known for an unbroken record of absolutely perfect successes.
And face it. The results could be catastrophic. Consider: The U.S. money market is $8 trillion. $75 billion is “only” 1% of this — but think. Most of that money is already committed to current investment or corporate use, is earmarked for future new or replacement capital, or is being held for future opportunities; it is considered the safest investment, better even than government bonds at this point.
If — as Musk evidently expects — the valuation of SpaceX reaches $1.75 trillion, a downturn could wipe out more than 20% of the value of the entire U.S. money market. To cover losses, institutions and individuals will have to liquidate cash holdings, usually at a loss with an admittedly catastrophic and hopefully unlikely result of destroying a fifth of the cash in the economy. A much smaller contraction of the money market — estimated at 2% of M2 and still considered “significant” at less than a tenth of the potential effect of a SpaceX downturn — caused the Panic of 1893, and it caused the second Great Depression, from 1893 to 1898.
Then there is the equities market. In December of 2025, the value of shares of companies listed on the New York Stock Exchange was estimated at $44.7 trillion — and note the outstanding debt of the federal government is nearly $40 trillion. In a very vague sense, that $44.7 trillion of private sector wealth is what stands behind the public sector debt of $40 trillion . . . leaving $4.7 trillion.
A $1.75 trillion hit if SpaceX goes down — more than a third of the “net worth” of the New York Stock Exchange listings — could potentially force down the value of all other shares, especially in the tech sector — which it will probably do, anyway, even without a single misstep on SpaceX’s part, since the IPO will suck away investment in other tech companies and the riskier investments in more “traditional” companies, lowering other share values as holdings are dumped to provide the cash to buy SpaceX shares.
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| Warren Buffett |
This has the potential to initiate a massive sell-off, dwarfing the effect of Trump’s adventure in Iran — and once that kind of panic sets in, it is virtually impossible to stop. The Crash of 1929 would be a walk in the park in comparison.
And what about the people like Warren Buffett who put a huge amount of his holdings into the money market . . . draining what is available for others? (We’re not criticizing Buffett; he did the prudent thing — but what about the rest of us?) It was similar “hoarding” that greatly exacerbated the “money famine” of the 1890s, bringing a significant portion of the economy to a grinding halt and inspiring such movements as “Coxey’s Army” (“Keep Off the Grass”).
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| Frederick Jackson Turner |
Exacerbating the problem was the fact that the frontier had “closed” as reported by Frederick Jackson Turner, leaving people with no way out. Turner predicted that the closing of the frontier would have a serious and fundamental effect on American democracy, changing it and the American character into a more “European” style subservience to authority and dependence on the government and powerful private interests.
Viewed this way, the SpaceX IPO — especially if it is successful! — has the potential of taking away the remaining shreds of the personalist American liberal democracy and replacing it with what Hilaire Belloc called “The Servile State”, a combination of individualist and collectivist liberal democracy, degenerating rapidly into an authoritarian oligarchy.
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| Hilaire Belloc |
This is pretty grim, but there is a way out — and one that doesn’t interfere at all with SpaceX’s IPO. And the way out?
Adopt the Economic Democracy Act (EDA). What will that do?
Save the global economy, for one thing, even if only adopted in the United States. A key part of the EDA is so shift new capital investment from existing money backed by government debt and thus future tax collections that might never materialize, to “future savings money” backed by the present value of future profits of new capital investment; from public sector backing of the reserve currency to private sector backing of the reserve currency — just as was proposed in the 1890s to correct the problem, and again to correct the same problem in 1913 when nothing had been done in the interim and another panic resulted.
Further, instead of traditional collateral, typically monopolized by people like Musk, allow ordinary people to use capital credit and reinsurance as Louis Kelso proposed. That would make it possible for everyone to purchase shares in proven, non-speculative companies (NOT SpaceX), spreading out ownership and thus power, restoring the tax base, and making America truly “great again” but without taking advantage of others.
#30#
