- Americans are burning through their savings and might virtually exhaust them within months.
Michael Burry warned the US economy could suffer once consumers empty out their savings accounts.
The US economy is being propped up by consumers cracking open their piggy banks, and could capitulate once their savings dry up later this year, Michael Burry warned in a $4.
"Charting Total US Personal Savings/GDP," he wrote$4. "Red line is the all-time low at 1.5%, set in July 2005. At the last 12mos' rate of depletion of savings, could hit that level between September and December this year. Borrowing time."
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Burry's view seems to be that consumers are raiding their savings accounts to weather
The hedge fund manager could also mean by "borrowing time" that consumers will have to load up on debt once their savings accounts are empty, or the federal government will have to engage in more debt-funded spending to keep the economy afloat.
Burry has issued similar warnings on Twitter in recent weeks.
For example, he $4 that Americans' dwindling savings, ballooning credit-card debts, and reduced savings rate could spell trouble for economic growth and corporate profits. "Looming: a consumer recession and more earnings trouble," he said.
In another tweet, Burry $4 that US consumers benefited from stimulus checks, forgivable loans, cash-out refinancing offers, and indirect fiscal support during the pandemic. He appeared to question how they could ever rebuild that wealth now that inflation, rising interest rates, and tumbling asset prices are ravaging household finances.
The Scion chief is best known for $4 the collapse of the mid-2000s housing bubble. He also $4 Elon Musk's Tesla and Cathie Wood's Ark Innovation fund last year, and $4 for the meme-stock craze by investing in GameStop before its stock skyrocketed.
Burry is notorious for predicting calamities and disasters. He $4 on the "greatest speculative bubble of all time in all things" last summer, and $4 buyers of meme
Moreover, he $4 the current market downturn to the housing bust that made him famous. "As I said about 2008, it is like watching a plane crash," he tweeted.