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the famed investor Michael Berry who astonishly won close to a billion dollars by betting against the U.S housing market in the middle of the 2000s has once again raised the alarm as the U.S inflation rate hits a 40-year high this time his forecasts for 2023 are gloomy the famous investor from The Big Short known for his pessimistic but frequently correct predictions made The Bleak forecast in a tweet last Sunday but are you ready for the impending economic turbulence stay until the end of this video to discover if you have the answer to that question but before getting into the details let's learn more about Michael Berry he is a highly accomplished neurosurgeon in addition to being a successful American investor who created the hedge fund Scion Capital with just little inheritance investors all across the world recognize him as one of the few who anticipated the subprime mortgage crisis and took appropriate action in 2007 bury was able to generate a tremendous profit of a hundred million dollars by shorting the mortgage bond market using collateralized debt obligations or cdos with a personal profit of 100 million dollars and a return to investors of 700 million dollars but what bury is really known for was his one billion dollar bet against the housing boom in the middle of the 2000s which was depicted in the book and movie The Big Short he also placed bets against Elon musk's Tesla and Kathy Woods Flagship Arc Innovation fund last year and by buying GameStop before its stock Rose at the beginning of 2021 he unwittingly laid the basis for the meme stock Mania Last Summer the Scion CEO issued a warning about the greatest speculative bubble of all time in all things cautioning investors in meme stocks and cryptocurrencies saying that they were headed for the mother of all crashes which they somewhat did so when this man makes a prediction concerning the future of the U.S economy it probably makes sense to listen as long as inflation stays at a 40 year high AI consumers and investors are concerned about how much the cost of living will increase and the question on everyone's mind is would the country experience another recession yes the frightening r word however there is little doubt amongst analysts today that a recession will occur in 2023 what took place during the covid-19 pandemic due to a number of circumstances including supply chain interruptions and a surge in demand for some products such as household goods and personal protective equipment several Nations saw a considerable rise in inflation during the covid-19 pandemic these elements combined with monetary policy actions taken by central banks such as increasing money injections to boost National economies led to a decrease in the number of items available in a rise on demand which raised prices What followed was inflation Rising levels of expenses and lowering the purchasing power of the average person's income the sudden increase in inflation was only brief and was brought on by the pandemic's special circumstances burrie's most recent economic forecast and warning are receiving more Credence according to a Bloomberg survey conducted in December among 38 analysts there was a 70 possibility that there would be a recession after 2022 up from 65 in November according to medium projections GDP will expand by just 0.3 percent overall in 2023.
this includes a quarterly decline of 0.7 percent on an annualized basis in the second quarter and no growth in the first or third quarters and according to Maria vesselu co-chief investment officer of multi-asset solutions at Goldman Sachs Asset Management she expects some changes in the foreseeable future in her own words she says we expect that the FED will stay in restrictive policy for a while unless the effect on real GDP growth and unemployment becomes particularly severe and inflation has fallen close to Target bury projects a decline in inflation and deteriorating economy in 2023 which he says will drive the Federal reserved to reduce interest rates in the government to boost expenditure to encourage growth raising demand and possibly triggering a rebound in inflation he said that the inflation rate has peaked but he also stated that this was not the Cycle's final Peak inflation peaked bury wrote on Twitter on January 1st 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 he issues a warning that the Consumer Price Index or CPI is likely to experience a considerable decline in the upcoming year and could even become negative in the second half of 2023 the long expected recession would occur as a result of such a drop in inflation the FED will cut the government will stimulate and we have another inflation Spike it's not hard Barry says all of this will result in a subsequent spike in inflation similar to what occurred during the covid-19 pandemic we'll essentially witness a practice run for what happened after March 2020 in response the Central Bank increased its base interest rate from a position of near zero to over four percent with the assumption that this rate would rise further and reach a peak of more than 5 percent in 2023 bury argues that by reducing consumption investment and employment higher interest rates have the effect of reducing inflationary pressures and by discouraging spending investment and hiring higher interest rates seek to reduce upward pressure on prices along with Michael Berry other well-known businessmen and investors including Tesla's CEO Elon Musk and Amazon owner Jeff Bezos have issued recessionary warnings according to Elon Musk a U.S economic decline May last up to 18 months he advised investors to ride it out by being cautious with their money avoiding debt and taking fewer chances on the other hand Jeff Bezos advises Americans to delay making new purchases and keep as much cash on hand as they can my advice to people especially small business owners is to take some risks off the table if you're going to make a purchase maybe slow down that purchase a little bit Bezos said last November if you're an individual and you're thinking about buying a new large screen TV maybe slow that down keep that cash and see what happens same thing with a refrigerator a new car whatever let's take some risks off the table if you're a small business maybe delay some Capital per purchases do you need that new piece of equipment maybe it can wait a little bit have some cash on hand just a little bit of risk reduction can make the difference for that small business Bezos concluded also the Bank of America Chief Economist Michael gapen also seems to share similar views about the economy he believes that the United States will have a recession in 2023 although he is less certain about his prediction he disclosed this on face of the nation it's not baked in it's not certain we may be able to avoid it but I would agree that the Outlook of most people who sit in the position that I do think 2023 could be a difficult year for the U.S Berry was one of the few investors who predicted the subprime mortgage crisis that lasted from 2007 to 2010.
he shorted the 2007 mortgage bond market by swapping cdos and profited heavily from it and as a result became one of the role models for flouting accepted wisdom in the financial industry the 2015 movie The Big Short show cases how the investor who had little prior knowledge of real estate and finance came to realize that the industry had turned into a sand castle with financiers and bankers developing exotic products based on mortgages offered to financially unstable households and borrowers with bad credit according to burry's Twitter handle Cassandra BC he seemed to enjoy the part he constitutes a party pooper for Traders and Risk Takers bury had warned last year that American families were borrowing more saving less each month and were very certain to deplete their savings by the end of the year suggesting the possibility of a Slowdown in consumer spending and an extended recession in recent months bird forecasted that the economy was about to decline drastically that there would be a wave of mass layoffs of white-collar workers and that the stock market which had enjoyed two years of success during the pandemic would soon face its worst slump the Striking thing is that by 2022 all these predictions came true which explains why we should really be concerned about brewery Sunday tweet so what do you think about what the financial experts have said concerning the recession do you think it's something the U.S can avoid let's hear your thoughts in the comments section below bye
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