The failure of several banks and a struggling real estate market suggest the global banking system is on the precipice of collapse, Tesla/Twitter/SpaceX CEO Elon Musk told Fox News host Tucker Carlson.

The billionaire entrepreneur revealed why he’s concerned over the de-dollarization happening around the world and the sudden collapse of Silicon Valley Bank and other financial institutions.

“So you’ve seen a couple regional bank collapses,” Tucker told Musk. “And we’ve been told that’s not a big deal, that these are isolated and each one collapsed for unique reasons, it’s not systemic in any sense. What’s your sense of the stability of the American banking system?”

“Well, it’s actually at this point a global banking system problem,” Musk responded. “So, we have a situation here where it’s not merely — it’s not the canary in the coal mine has died but the miners are starting to die, too. (Laughs) So Silicon Valley Bank collapsing overnight is one hell of a big canary, it’s more of a turkey, it’s not like some small fry thing.”

“I think there is a serious danger with the global banking system,” he continued. “There’s a strong argument that the — if you were to actually market the portfolios of the banks, the loans and whatnot, that the entire banking industry would have negative equity.”

“It feels that way,” agreed Tucker.

Musk went on to explain how the rise of remote work due to the pandemic led to a significant decrease in the usage of commercial real estate such as offices, causing high vacancy rates in many cities worldwide, even New York, which used to be considered a safe and secure asset.

Some of the safest, you know, assets you could have. Now that is not the case anymore. One company after another is canceling their leases, or not renewing their leases. Or if they go bankrupt, there’s nothing for the bank who owns that real estate to go after because, you know, they were a previously strong company 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. So the stuff we’ve seen so far hasn’t even actually hasn’t even — it’s only slightly real estate portfolio degradation. But that will become a very serious thing later this year, in my view.

I think if we see, which we’re likely to see, a drop in house prices, because the interest rates are too high, and for most people when buying a house they look at the monthly payment.

In 30-year-mortgages the vast majority is in interest. So if the Fed rate is high — you have a high base interest rate — effectively the price you can pay for the house drops because now you 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.

This is the kind of thing that tends to accelerate. So then you can get negative equity in the home market as well. And so if banks end up having loan losses in both their commercial and — well they’re definitely going to have loan losses in their professional portfolio but also in their mortgage portfolio, this is a dire situation.

There is a solution to mitigate the magnitude of the damage here, which is for the Fed to lower the rate. But they raised the rate again. Now, if I recall correctly, which I, you know, important caveat I think the last time the Fed raised rates going into a recession was 1929.

“What happened then?” Tucker asked.

“Yeah, the Great Depression,” Musk replied.

Elsewhere during his bombshell interview, Musk revealed Google has long planned to create an AI God and that he has repeatedly warned the company’s owners against it.