An economic Armageddon is rapidly heading our way. according to Mr Michael Burry. Over these past few days, the Ever Peachy Bury made some new statements that, quite frankly, if true, will very quickly mean the destroying of a lot of the major pillars of this economy. And the truth is folks, we know that he's been quite the Doomsday predictor for quite a long time, and a lot of his most dire predictions have been skirted or pushed down the road by aggressive fiscal and monetary policy, an insane amount of money Printing, and money borrowing.

However, over the last year and especially over the last quarter, these tools have been pushed aside and as these tools are getting pushed aside, his predictions were coming more and more true. In fact, it looks like a lot of the things he's been saying for years have actually already started occurring and in this video I'm going to take you through his latest warnings and biggest forecasts for what is coming immediately in the future. And I promise you, if you watch this video to the very end, you are going to have a completely different perspective on this market and you are going to be much better prepared. Okay I Want to start with what he's been saying since the end of summer and then we are going to go ahead and build up to what he said this past weekend.

So this tweet really here sets the tone: August 20th Ever wondered why doomsday scenarios so rarely come true in your life on this Earth because debt And then he shows a chart hither where real and nominal GDP as a percentage of U.S Public debt has been shrinking rapidly since the 1970s, and it shows in Yellow Debt alone skyrocketing aka the amount of our economic health and growth attributable to actual GDP is at its lowest point since the 70s, And this raises a very, very important point. if somebody goes and makes a legit analysis on a very strong weakness in our economy, and then the FED just goes and prints over it. Well, Does that mean that that analysis was wrong? Or does it mean that that foundational weakness was just pushed for farther ahead and sometime down the road, we're gonna have to deal with it. And of course, government expects us to believe that debt and money printing is a solution to any problem that can come up.

But here Bury is saying, hey, wait a second Yes, that can work for some time, but it creates a much much bigger problem down the line every now and then. Maybe once a decade or every other decade, you get yourself into a crisis that simply can't be borrowed out of or inflated away. And this is the type of Crisis we are in now according to Bury. Okay, August 11th NASDAQ A bull market because it is up 20 off.

Its low. Who makes this stuff up? After 2000, the NASDAQ did that seven times as it fell 78 to its 2002 loan. you pull up the NASDAQ 100. This is about where he said that a couple trading days before the Bear Market rally plummeted to what eventually brought us to new lows that we just hit last week.

At the time of this tweet, we had just come off a huge bounce and many Market participants criticized him saying no, you are stupid but you're a fear Monger we are in recovery mode are you stupid Bear Markets They don't have bounces this big, but guess what, Bear markets have a ton of different Illusions The illusions of a Bear Market can really bring out the most greedy of our instincts. but as he said, hey, the NASDAQ did the seven times seven times as it fell 78 overall to its 2002 low and we talked about that back then as well. During literally the Heights of the Bear Market rally, we said hey, during the.com bust, you had some Bear Market rallies that lasted three to six months. He also tweeted that contrary to the internet and the Twitter sphere, there have been Bear Market rallies that eclipsed 50 retracement and led to a lower low AKA You had markets bounce 50 and still ended up continuing the overall bearish trend and making a new low.

So many people like to go and they like to look at a day, a week, a month, even a couple months of trading and say okay, well, the Bear Market's over. But if the fundamental factors that were driving the Bear Market in the first place aren't getting better at all or showing some light at the end of the tunnel and fact are actually getting worse, then how can you be so confident that the Bear Market is over September 6th he goes and tweets inflation appears in spikes When the spike is resolving, it won't be because of Biden or Powell, it will be because that is the essence the nature of inflation it resolves fools people and then comes back when it comes back, neither the POTUS nor the FED will take credit and then he shows a picture of the lovely Consumer Price Index or as I like to say, the castration of purchaser's index. So right now we are being sold on the future trajectory of inflation looking something like this. It's hot right now they say, but it goes down solidly until it hits the Fed's Baseline two percent, No pain, no foul, nice soft Charmin toilet paper Landing but according to Bury he sees it looking something more like this: You have inflation go up massively like we're seeing right now and then calm down, massively fooling everyone, which then causes a shift in policies and causes inflation to come back much, much worse.

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Okay, September 7th No, we have not hit bottom yet. Watch for failures, then look for the bottom 2s pack ETFs Failing is not near enough. This is where he said this. The S P 500 had taken a slight pause in the aggressive selling off and the financial media was running stories saying that we bottomed back in June and wouldn't reach a new low ever again.

But Brewery says here, hey, wait, watch for massive failures and then look for the bottom. If you haven't had massive widespread failures, you haven't had a bottom yet. If the Fed's policy making has not even started to create massive, widespread systematic failure, then guess what? We haven't bottomed yet and likewise, bottoms did fall out further. and now we hit a new low September 12th He tweets Goldman keeps stepping in it AIG was rescued to save Goldman from the other subprime issue that everyone swore would not be contagious.

Goldman's Apple card more than a quarter to subprime borrowers three percent loss rate on that business as of Q2 So of course here he is referencing the 08 AIG rescue and saying those bailout measures were to stop the spreading of the collapse of subprime debt. And he's saying hey, Goldman is doing the same thing again. they haven't learned their lesson. An example being that more than a quarter of Goldman's Apple card customers are subprime borrowers more risky borrowers.

And moreover, if Goldman is doing this, you better bet that a lot of the rest of the industry is doing it too. You even look at some new forms of subprime lending like buy now pay later. You have people now going and taking out debt to buy simple items that cost 10 or 20 bucks. And when people all across the economy are doing this and they're having to pay all these monthly penalties and monthly fees, that's a massive massive risk when everything starts getting contractionary.

September 13th Why inflation is the worst kind of regressive tax. The cost of food at home has never risen this far this fast. Before here, Bury is clearly painting a picture that few want to acknowledge when you are gutting the consumer quarter after quarter after quarter, through huge inflationary pressures and that consumer has to rely on the Evermore Financial system, the Evermore flimsy Financial system to borrow debt to make ends meet. Well, eventually you reach the final straw and something breaks and everything collapses.

He says also that this is regressive in that the poorest people get taxed the highest by inflation. In a progressive system, people get taxed as they make more money. But in a regressive system and inflation is a very, very regressive, systematic threat. If you're someone who is living, paycheck to paycheck.

Well, when daily items become more and more expensive, guess what? It screws you the most if you are relatively wealthy and you don't live paycheck to paycheck in this economy, guess what? Yes, inflation still sucks for you, but the dollars in your account, they're actually going farther. Why? Well, because the stock market is getting cheaper. The real estate market is getting cheaper. Basic assets that tend to go up in value over time are all getting cheaper.

So you can use that cash and go and buy these assets at a dip and grow your wealth at a much faster clip. Meanwhile, all these people living paycheck to paycheck, they're getting screwed. They're getting destroyed. They're borrowing out of their ears.

So anybody that's running policies that create massive inflation, they're gutting. They're gutting the poor class, the working class, and yes, the middle class. And they are enriching the richest people in society. In my view, we want a system where we don't penalize rich people, but we certainly don't penalize poor people.

We want everybody to do better. We want to create economic growth and prosperity for all and for everybody to do better. But right now, based on this economic situation that we are in, which is a result of a lot of different things, not just government and central banks, but a lot of different economic factors and this pandemic we just came out of. Well because of this, a lot of hard-working Americans are getting completely destroyed right now and people around the world the average person is just getting destroyed and Wall Street analysts.

Yes, they're upset that their portfolios are down, but they don't feel the same way that your average person feels about this. And because they don't feel that they can't see the writing on the wall here. which is, hey, all these extra expense companies, all these fair weather companies that do well during Good Times Well, they're not going to do so good when nobody has any money to do anything anymore. September 15th When something falls from the sky, it is not the fault of whoever put it up there in the first place unless the Fed put it up there.

My view is he is saying here that it's the Fed's fault that inflation is Sky High because the FED created policies that put an insane amount of Demand on very very limited Supply And now it is the Fed's task to bring it back down and it will be the Fed's Fault when the economy falls down as a result of that. As a side effect of that, the FED is a centralized Authority that attempts to skirt free market forces that would otherwise. Drive These things. and it does that by having a foundational Monopoly on our credit system.

If The Fed wants growth. It goes dovish. If the FED wants slow down, it goes hawkish. So he seems to be saying, when you have a centralized Authority controlling something, you know who to blame when things break.

Also, September 15th A small value investor buying stocks at three to five times free cash flow does not mean the investor is bolstering or backing the business. The investor is mucking around with well-punished companies and focusing on the financials and catalysts so you get a better deal on Your Meme stock. So there's this idea out there that because you're seeing retail investors and small funds bail out beat down companies, That that means that these businesses will be able to survive years of down trading, cash flow and accelerating debt and still come out on top. But he seems to be taking the approach that in a much bigger recession, these Beatdown stocks will only go down even more.

I Think he's specifically talking about any beat down popular stock. People are buying the dip on them, looking at the last 10 years of monetary policy and saying hey, well this is a good deal based on those last 10 years, but they're not acknowledging that if we continue to go into this restrictive era, well, things are going to get much, much worse. Before they get any better. And these companies aren't really going to get bailed out by these small-time investors, they are just going to go under and obliterate all that cash.

They need a lot more money to stay afloat than a lot of small time investors and small funds. Think according to Murray at least September 21st, there is risk growing in many sectors The Unfettered Narrative Feeding itself until the absurdity explodes, revealing the Folly to all and easily starting a revolution. So what is this risky is referencing Charlie There is no risk. The FED is literally just doing a routine tightening.

Now, of course, the FED is timing at a rate that we haven't seen in four decades. Really, the the FED is tightened at a rate that we've never seen before. But we were just talking this previous week about how debt has surged from just over a hundred percent of GDP in 1970 to 256 by 2020.. All of this debt allowed companies and institutions to borrow their way out of any problem they came across and grow on top of flimsy foundations.

But what happens? What happens when they can no longer do that? September 26th Margin leverage isn't what it seems because of options. Vix isn't what it seems because of Futures Consumer Credit isn't what it seems because inflation QT is exactly what it seems. What is he saying here? I See it as him criticizing the Bull's opinion that we shouldn't take the alarming record levels of margin Consumer Debt or anxious levels of Vix as a sign of trouble because oh, this or that means that this time is different. This time isn't going to be any sort of blood battery because of this or that.

Well, he's saying, hey, quantitative tightening. There's no way to explain it away. You can explain away everything that? You want and you could say, well, you know things are bad, but if you just adjust for this or that, it's not that bad. Well, with quantitative tightening, it's across the board terrible.

This is a chart of the Fed's balance sheet of assets it bought to prop up the market in the first place with money that it pulled out of, of course, thin air. And there's a lot of people that genuinely believe that when all of this money is flushed out of the system, that that will have no impact on asset prices or the economy. And that to me, sounds crazy and it sounds like Bury is suggesting that as well. Okay, September 28th velocity is nominal GDP over money supply M2 here QT plus higher rates starting to push M2 down.

yet we are seeing a tick up in velocity emerging from narrative obscurity in 17 in 1978 to 1979, Rising velocity trumped falling money supply To drive inflation higher and higher Redux would shock I Think a degree in Haiku would be a lot more helpful in interpreting his tweets than a degree and say economics or something like that. But here he's saying, in my view, when least the best I can make it out. He's saying that quantitative tightening plus higher rates are bringing M2 money supply, which is cash and cash equivalents down. The FED is essentially evaporating the supply of money by raising rates and selling off its balance sheet.

However, the velocity of money how fast it exchanges hands is going up. What drives inflation is of course not the sheer supply of how much of something is out there, but how fast that Supply is circulating. If somebody prints a billion dollars and I put it in my basement and it never makes it out to the economy. It's not going to cause inflationary pressures on Demand right? It's not going to cause any artificial demand.

But if somebody goes and prints a thousand dollars and circulates it around the economy to some level that is going to be more inflationary than the billions of dollars that I'd put in my basement. So in that sense, Bury is saying hey, the FED is draining a lot of that basement, not moving around money from the economy, but at the same time. Guess what? The money that was out there causing all the inflation and moving around and actually circulating that is not going away. In fact, that circulation that velocity is going upward.

the FED is going to have to go a lot more aggressive of in order to actually get it to go back down. September 29th, which was last week when the Dow suffered its largest single day drop in history today. I Wondered aloud if this could be worse than 2008 What interest rates are doing Exchange rates globally. Central banks seem reactionary and in cya cover your ass mode.

One of my analysts said it was spooky that today I would wander that Alpine anniversary. So here he's making a reference to 2008 and he says anniversary on the same day September 29th. But back in 2008, the Dow also had dropped to its biggest single day point loss ever. This was after the house at that time had rejected the government's 700 billion dollar Bank bailout plan and things continue to spread and get worse after that.

October 1st 13.48 of stocks closed above their 200-day moving average yesterday. Bottom in 2009 was 1.2 percent. Bottom in 2020 was 2.8 percent currently at December 2007 levels. So he's saying here, hey, you still have 13 18.48 of stocks that are closing above their 200 moving average their 200 ma which is close to the stats in December 2007.

If you want to be somewhere near a floor, it needs to be nearly a hundred percent also. October First difference between now and 2000 is the passive investing bubble that inflated steadily over the last decade. All feeders are overcrowded and the only way anyone can get out is by trampling over each other. And still, the door is only so big.

So by passive investing, what is he talking about Hither he is talking about index funds. Passive investing over the last two decades by way of index, fund or basket of stocks has grown incredibly popular. A lot of people in the 80s would hire a fund manager. The fund manager.

would take huge fees, and they create their own portfolio for them of stocks that the fund manager had picked. Now, people can go out and very very popularly go out and buy an S P 500 or a similar index fund and they pay very, very little fees. And statistically, that strategy has outperformed quite a lot over the last hundred years. But he he's raised problems with this strategy when taken too far and when too many people do it, and when the market too overly relies on concentration in these indices.

I Made a video about this passive investing problem and specifically Michael Burry's predictions back in 2019 and the main problems with this have only become more true. Index funds essentially remove the price Discovery process. People aren't questioning the valuation anymore, the timing or even the diversification of companies in each. Index Fund They are just regularly buying over time and pouring money endlessly into them, not carrying that.

Some stocks in the fund will be undervalued and some will be greatly overvalued by the time they buy in. When you're just buying 500 companies, blanketly, you aren't questioning at all which ones were good deals or which ones aren't You're just like, okay, I'm gonna buy it and that creates huge inefficiencies when done on such a widespread scale. And with funds that are Market weighted like the S P 500, the companies with the biggest valuations tend to get more Capital allocated to them than the other ones just by sheer nature, that they have higher evaluations. Which that doesn't reward companies based on businesses that they actually have in our successful app.

No, it rewards them based on how much money people put in them in the past, and obviously during a bull market where people have lots of money to invest. hey, you may not see a lot of structural issues with that, but when things start going downhill all of a sudden, the real price and the real valuation these companies should be trading at gets revealed. So he's saying hey, warning A lot of stocks have been over inflated by this passive investing bubble. and if you're comparing businesses and trying to Value them based on what they were valued at the last 10 to 15 25 years, well you have to consider that the passive investing bubble has completely warped what valuation should be at.

And finally, the last tweet quote. Another feeling I'm getting is mid to late 2000 free cash flow totally on sale and ignored while former Momentum stocks are coming down but not far enough and darling better businesses still had a ways to fall value was about to take off for more years despite more crash on the way here. He's referencing the.com bust again In that bust, even if you had the fundamentals and the cash flow to actually back your valuation, well, you still got overly beat down. but at the same time, a lot of the momentum stocks from the previous cycle run that had absolutely no fundamental backing or free cash flow to support their valuation.

Well, they took a very, very long time to come down. and because they took such a long time to come down, the overall crash took so long to actually finish and bottom out. So here's my concluding thoughts on this: Michael Burry is watching this downtrend and in his view he thinks the Bulls behind this downtrend are completely missing the bigger picture. They are holding up a market that doesn't deserve to be held up.

They are buying faking, things are on discount when in reality they are only on discount if you are still on that same monetary policy. Easy, easy monetary policy schedule that we had been on the last 10 plus years, but in a high interest rate, low economic activity environment that the FED is trying to push us into. He sees huge risks across the board and still thinks that these valuations, even at the discounted points today are way too frothy. Now, if I was going to give one small criticism or really not even a criticism but an asterisk on berries production section, here is you have to keep in mind that Bury he doesn't really take into consideration how far the Fed and the government is willing to go to kick things down the road.

I'll make a doomsday prediction based on what happens if we don't put more fiscal and monetary stimulus in the system, but then when shite hits the fan, we end up always doing that so it ends up making him look wrong when in reality he highlighted something that was very, very much a risk factor and a very, very big inevitability if we hadn't done those things. But regardless of how long we pushed the can down the road, eventually, you do have to end up paying for everything that we did to skirt all of these different. Crisis Psy Or Crisis C Crisis C Yes, Crisis C You can't borrow and print your way out of economic bludgeons forever. I Think that the FED is going to follow through on this restrictive policy trajectory that we've been highlighting the last couple of weeks and that they've highlighted.

and I Think they're going to follow through on it to the very minute that unemployment starts skyrocketing and huge, massive failures across the financial system become very, very very apparent. And at that point at that point the FED is going to reverse and all of a sudden it's going to go back to buying assets. It's going to go back to lowering interest rates. The government, the Federal government's going to go back to insane fiscal stimulus.

and that, ladies and gentlemen will probably cause a very, very intense opportunity. The only question is what happens when the can can no longer be kicked down the road? What happens when you get another huge inflationary spiral? That's the question that I would keep in mind folks. Anyways, if you appreciated this deep dive that took a lot of work and research, make sure to hit that ravishing subscribe button. If you're looking to get up to 15 free stocks with MooMoo and one of the best platforms around, I will put a link to them down below.

Have a good one folks and I will see you in the next video.