On June 12, local time, Nobel Prize winner Paul Krugman published an article titled "Elon Musk, Human Ponzi Scheme", calling Elon Musk, the world's richest man, a Ponzi scheme.

The original text is compiled as follows:

Yesterday I took a short trip. First, I rode the local Hyperloop, which travels through tunnels dug by the Boring Company. I then summoned a fully self-driving Tesla robotaxi via a brain-computer interface. Along the way, I also read the latest news from the Mars colonies.

Well, none of that happened because those products didn’t exist.

There are currently no operational hyperloops; the Boring Company has not dug a single commercial tunnel; and Tesla has only deployed a handful of self-driving (but not fully self-driving) taxis in Austin and none elsewhere. (Google's Waymo self-driving taxis have been put into operation in many major transportation hubs.) Neuralink, which is said to be committed to pioneering brain-computer implant technology, has only tested its product on a few patients and has made no other progress. Of course, there is no such thing as a Mars colony - humans have not yet carried out any manned missions to Mars, and there are no such prospects in the foreseeable future.

However, over the past decade, Elon Musk has repeatedly promised that all the above services will be available by 2025 at the latest, or even earlier.

It is undeniable that Musk has indeed achieved some real achievements. Tesla has seized the opportunity to develop electric vehicles early. Starlink is not only a vital service, but also a profitable business.

But these achievements are not enough to make Musk the richest man in the world. In fact, his wealth has long been based largely on self-fulfilling beliefs - investors are convinced of Musk's "genius persona" and have piled into the stocks of the companies he controls, and the rise in the market value of these companies has in turn consolidated his reputation as a genius.

We use a term to define such companies: they appear successful because they continue to attract new investors; and they continue to attract new investors because they appear successful. This type of business is called a Ponzi scheme. And Elon Musk is essentially a real-life Ponzi scheme.

In addition, the current initial public offering (IPO) of SpaceX makes it clearer than ever that Musk is not best at developing future technology products, but is proficient in financial deception and using internal influence to profit - especially his influence on the Trump administration.

To understand this, let’s look at the case of Musk’s acquisition of Twitter (later renamed X) in 2022. To complete the deal, investment banks provided Musk with a $13 billion loan, and originally planned to sell the debt to other investors soon. But Musk then turned X into a dirty platform filled with extreme right-wing speech and condoning Nazi ideas, completely destroying its business model and causing advertisers to withdraw. By the summer of 2024, X’s valuation is less than half of the acquisition price. If the debt is sold at this time, the bank will face a 40% loss and has no choice but to hold this Twitter debt for a long time. This also directly led to the headline report of the "Wall Street Journal" in August 2024: "Elon Musk's Twitter acquisition has become the worst merger and acquisition in the banking industry since the financial crisis."

But two things happened subsequently, which not only rescued these banks, but also preserved Musk’s future credit qualifications: First, Donald Trump was elected President of the United States in 2024, and second, the rise of the artificial intelligence wave. After Trump was elected, advertisers began returning to X, citing the need to please Musk and Trump. In March 2025, Musk merged his newly established artificial intelligence company xAI with X, taking advantage of the rising artificial intelligence craze to further increase the valuation of X and beautify his personal balance sheet.

Unfortunately for Musk, evaluations from all parties have pointed out that the performance of the Grok large model developed by xAI is far inferior to the artificial intelligence models launched by Anthropic and OpenAI, and is generally considered to have safety hazards and insufficient reliability. The model once posted racist and anti-Semitic remarks and even called himself "Mechanical Hitler." Trump administration officials have pressed government agencies, including the Pentagon, to use Grok, but with little success.

Therefore, Musk first saved X by merging X into xAI, and now he is trying to save xAI by merging xAI into SpaceX - and SpaceX's Starlink business is indeed a successful business.

Just today, SpaceX officially went public. Its initial public offering (IPO) was listed on Nasdaq, and the company valuation corresponding to the issue price was as high as US$1.77 trillion. The company’s revenue last year was only US$18.7 billion and it was in a loss-making state.

What is the basis for such an “astronomical” valuation? Part of the core logic of this IPO is the tacit understanding that retail investors will follow suit - not because they have made a rational assessment of SpaceX's commercial value, but because they believe that what they are buying is "the aura of Elon Musk's genius."

But this group of loyal fans alone may not be able to maintain this financial hoodlum. As a result, Musk's allies on Wall Street have also stepped in to dictate the rules of the game. Some major stock indexes, especially the Nasdaq 100 Index and the FTSE Russell Index, have recently revised their rules to pave the way for the rapid inclusion of SpaceX.

You know, a company's stock being included in a major stock index means huge economic benefits. A large number of stocks in the market are held by "index funds" - mutual funds whose portfolios exactly replicate the components of a major stock index. Therefore, once a stock is included in a major stock index, index funds must passively increase their holdings, thereby immediately forming a buying demand for the stock.

In the past, mainstream stock indexes would wait at least one year after a company's IPO before evaluating whether to include it in the index, in order to give the stock price enough "maturity period." This time making an exception to modify the rules for SpaceX is enough to prove that Musk has once again demonstrated his ability to win over and corrupt key institutions. (It’s worth noting that the S&P 500 resisted pressure and insisted on waiting a year before deciding whether to include SpaceX.)

This also leads to my core point: Elon Musk’s huge real-life Ponzi scheme will eventually collapse. Traditional Ponzi schemes only trap investors who voluntarily participate, but this time, a large part of the funds supporting Musk's scheme will come from ordinary Americans - they are essentially "forced into the scheme." Currently, about 52% of mutual fund assets are invested in index funds or index-linked funds, and more than 50% of U.S. households hold mutual funds. Musk’s collusion with Wall Street, and the widespread perception that the Trump administration is backing him, will lead to the vast majority of ordinary investors being involuntarily involved and becoming the “fuel” of Musk’s capital empire.