Famous investor Michael Burry, who knew beforehand the 2007 crisis in the USA, suggested that inflation would be triggered in 2023 in order to prevent a recession.
The past year has been tough in the global economy and the accompanying risky asset investments. The move taken by the USA against inflation negatively affected the trillion dollar money flow. Dollar-based tightening hit risky asset investments and stock market shares hard. By the end of the year, the fear of recession and the massive collapse of the cryptocurrency market drew attention. As we enter the new year, a remarkable prediction came from the investor who knew the great crisis in the USA beforehand. Michael Burry, nicknamed Big Short, scared off investors.
Knowing the Big Fall, Investors Expect More Inflation and Decline!
Michael Burry, who was aware of the Mortgage Crisis that broke out in 2007 and made money by opening a bearish trade, made a prediction for 2023.
Inflation peaked. But it is not the last peak of this cycle. We are likely to see CPI lower, possibly negative in 2H 2023, and the US in recession by any definition. Fed will cut and government will stimulate. And we will have another inflation spike. It's not hard.
— Cassandra B.C. (@michaeljburry) January 2, 2023
Michael Burry argued that inflation is currently at its peak, but this is not the last peak of the cycle. Burry expects a negative market and the danger of recession in the second quarter of 2023. According to the famous investor, this recession will also change the moves of the USA. The Fed will cut the tightening and the government will provide incentives. Evaluating all these, Burry claimed that there would be another inflation increase.
The prediction of the famous investor attracted great attention from Twitter users. Many investors began to fear that Burry, knowing the big fall, might be right.
Because if Burry is right, the recession and the accompanying easing will negatively affect risky assets. Increasing inflation and the Fed loosening the strings will likely cause a drop in the cryptocurrency market, led by Bitcoin.