Per Market Insider
Michael Burry Gives 2023 Predictions: 'We Will Have Another Inflation Spike'
1/2/2023
Michael Burry acknowledged that inflation peaked but said this wouldn't be the end of the peak cycle. The "Big Short" investor says the Consumer Price Index (CPI) is likely to drop further, and another inflation spike will likely happen.
The "Big Short" film was based on Michael Burry, the man who predicted the housing crash of 2008 and made money by betting against it. While it's been a long time since Burry has made any big moves, the investor is now giving his predictions on 2023 and how it will likely turn out.
Burry took to Twitter to explain how the US is heading for a recession in 2023 as another inflation spike is on the way. The "Big Short" investor expects the government to jump in, causing inflation to increase again.
Burry: "Fed will cut and government will stimulate. And we will have another inflation spike. It's not hard."
So far, inflation was at its 40-year-highest in June, when it reached 9.1%, towering over the 2% target by the Federal Reserve. The higher interest rates caused a chain effect on prices, discouraging spending, investing, and hiring, ultimately slowing the economy.
Michael Burry, the chief of Scion Asset Management, warned in April 2020 that reopening the economy after the pandemic would cause inflation to rise. Over two years later, the economy's performance leaned somewhat towards the predictions of the "Big Short" investor.
Aside from the economy, Burry also bet against Elon Musk's Tesla and Cathie Wood's Ark Innovation in 2021. In 2022, Tesla stock dropped by 65%, per WSJ, and Cathie Wood's ARKK ETF dropped by 67%, per Seeking Alpha.
Regarding timing, Burry was ahead of the meme-stock craze as he invested in GameStop before the stock suddenly skyrocketed in early 2021. The Scion Asset Management did, however, give a gloomy prediction regarding meme stocks and cryptocurrencies in a now-deleted tweet.
Burry: "When crypto falls from trillions, or meme stocks fall from tens of billions, #MainStreet losses will approach the size of countries."
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