Hedge fund manager Michael Burry, the famous 2008 financial crisis forecaster, has said that although inflation has already reached its peak in the US, another surge is expected. He predicts that the US economy will be in recession “by any definition.”
Michael Burry’s Economic Predictions for 2023
Celebrity investor and founder of Scion Asset Management Michael Burry shared his economic predictions for 2023. Burry is perhaps best known as the first investor to identify and profit from the US subprime crisis, which took place between 2007 and 2010. His profile was featured in “The Big Short,” a book by Michael Lewis, which was also made into a movie starring Tom Hanks and Christian Bale.
Burry tweeted Sunday: “Inflation has peaked. But it is not the last peak of this cycle.” He continued:
We anticipate that in the second half of 2023, CPI will likely be lower than expected and could even decline, with the US still in recession. The Fed will stimulate, while the government will restrain. And inflation will continue to rise. It is not complicated.
Many on Twitter agreed with Burry. Attorney John E. Deaton tweeted: “I think this is correct.” Economist Peter St. Onge wrote: “The smart kids agree: lower inflation will be temporary, then the Fed turns on the money printers and does it again.”
Investment specialist Karel Mercx commented: “Michael Burry has a point…inflation usually happens in waves, and there rarely is a single wave (see the CPI chart from the 1970s). The five most dangerous words in investing remain: ‘this time is different.’”
Investor Kerry Balenthiran agreed with Burry, tweeting: “Okay, but the next inflation spike could be over in a decade or more. This is much like the secular bull market from 1947 to 1965. In that case, there was postwar inflation that subsided, followed by an inflationary environment that finally peaked in 1980.”
Other views were also offered. Former broker Rob Bezdjian, for example, believes in deflation. “I’ll take the other side of your inflation prediction…we’ll be in deflation for a long time. Bubbles take a long time to inflate again,” he opined.
Burry has issued numerous warnings about the economy. In November, he foretold of 2022 being “a protracted multi-year recession.” In May, the “Big Short” investor warned of an impending recession for consumers and worse profit problems. In April, he stated that he believes the Fed “has no intention of fighting inflation,” stressing: “The Fed is all about reloading the monetary bazooka so it can come to the rescue and fund the fiscal option.”
