OH NO! Americans spending away savings they had during covid!

Because of the inflation battle going on. Things will be getting worse no doubt about it now.

https://www.yahoo.com/finance/news/big-short-investor-michael-burry-114816383.html

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 Big Short" investor expects rising debt and reduced savings to hit growth and company profits.

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 recent, now-deleted tweet.

"Charting Total US Personal Savings/GDP," he wrote. "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."

The investor of "The Big Short" fame attached a chart showing US personal savings have plunged from over 25% of GDP in the spring of 2021 to about 3.8% today, and are on course to hit a record low of under 1.5% later this year.

Burry's view seems to be that consumers are raiding their savings accounts to weather inflation in food, energy and housing costs, and a recession is likely once those cash reserves are exhausted.

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 cautioned 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 noted 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 predicting and profiting from the collapse of the mid-2000s housing bubble. He also bet against Elon Musk's Tesla and Cathie Wood's Ark Innovation fund last year, and inadvertently laid the groundwork for the meme-stock craze by investing in GameStop before its stock skyrocketed.

Burry is notorious for predicting calamities and disasters. He rang the alarm on the "greatest speculative bubble of all time in all things" last summer, and warned buyers of meme stocks and cryptocurrencies that they were facing the "mother of all crashes."

Moreover, he recently compared 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.