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Major American Investor Who Caught And Warned About The Subprime Crisis Declares What We Have Been Telling You, Says Major Instability In Stocks Will Happen

By on February 22, 2021 in Featured, General

Michael J. Burry is a famed American investor, and the inspiration behind the 2015 film The Big Short, who came to fame after spotting volatility in the housing market in 2006 that resulted in the great crash of 2007 and 2008, which brought about the TARP bailouts and the era of money printing that has since driven debts through the proverbial roof and without end.

Shoebat.com has been adamantly warning about financial speculation as a trend, and how the scenario of 2007 is repeating, except this time on a larger scale. Such is what Burry wrote on his Twitter account, and has been reported on by Business Insider, where he specifically cites the money-printing and debt-ignoring MMT philosophy- something that Shoebat.com has reported on and warned about would lead to the destruction of the currency through hyperinflation, meant in the true sense of currency devaluation through oversupply without something to back it up of real value -as being a major factor in this economic danger.

Rampant speculation and widespread betting with borrowed money have driven the stock market to the brink of collapse, Michael Burry said over the weekend.

“Speculative stock #bubbles ultimately see the gamblers take on too much debt,” the investor tweeted along with a chart showing the S&P 500 index and levels of margin debt both soaring in recent months.

“The market is dancing on a knife’s edge,” Burry added.

Burry said the flow of cash from actively managed funds to index trackers and the boom in day traders sharing tips on social media and touting meme stocks had helped to fuel the market upswing.

“Passive investing’s IQ drain, and #stonksgoup hype, add to the danger,” he said.

In another tweet, the Scion Asset Management chief highlighted a “massive spike” in the volume of bullish call options being traded. He added the hashtags #cautiontothewind and #blowofftop to emphasize his view that those types of wagers are propelling stocks to extreme levels.

Burry is best known for his billion-dollar bet on a crash in the US housing market in the mid-2000s, immortalized in “The Big Short.” Christian Bale portrayed him in the movie adaptation of the book.

The investor also laid the groundwork for the GameStop short squeeze when he backed the video-game retailer in 2019 and wrote several letters to its bosses.

Burry tweeted on Sunday that his latest warning was being ignored just as Wall Street dismissed his warnings during the housing bubble.

“People say I didn’t warn last time,” he said. “I did, but no one listened. So I warn this time. And still, no one listens. But I will have proof I warned.”

Burry doubled down on his view by adding that quote to his Twitter bio. His display name is Cassandra, a reference to the priestess from Greek mythology who was cursed to share true prophecies but never to be believed. (source)

You can see his tweets below

Since tweets are known to disappear, and Twitter cannot be relied on for the future as it is a corporate entity, the following below is an extraction of the data above, mostly written between February 21st, 2021 at about 3:30 PM until about February 22, 2021, at 11:00 AM.

The US government is inviting inflation with its MMT-tinged policies. Brisk Debt/GDP, M2 increases while retail sales, PMI stage V recovery. Trillions more stimulus & re-opening to boost demand as employee and supply chain costs skyrocket. #ParadigmShift

Click to access jens-parsson-dying-of-money-24.pdf

“The life of the inflation in its ripening stage was a paradox which had its own unmistakable characteristics.
One was the great wealth, at least of those favored by the boom..Many great fortunes sprang up overnight…The cities, had an aimless and wanton youth”

“Prices in Germany were steady, and both business and the stock market were booming. The exchange rate of the mark against the dollar and other currencies actually rose for
a time, and the mark was momentarily the strongest currency in the world” on inflation’s eve.

“Side by side with the wealth were the pockets of poverty. Greater numbers of people remained on the outside
of the easy money, looking in but not able to enter. The crime rate soared.”

“Accounts of the time tell of a progressive demoralization which crept over the common people,
compounded of their weariness with the breakneck pace, to no visible purpose, and their fears from watching
their own precarious positions slip while others grew so conspicuously rich.”

“Almost any kind of business could make money. Business failures and bankruptcies became few. The boom suspended the normal processes of natural selection by which the nonessential and ineffective otherwise would have been culled out.”

“Speculation alone, while adding nothing to Germany’s wealth, became one of its largest activities. The fever
to join in turning a quick mark infected nearly all classes..Everyone from the elevator operator up was playing the market.”

“The volumes of turnover in securities on the Berlin Bourse became so high that the financial industry could not
keep up with the paperwork…and the Bourse was
obliged to close several days a week to work off the backlog” #robinhooddown

“all the marks that existed in the world in the summer of 1922 were not worth enough, by November of 1923, to buy a single newspaper or a tram ticket. That was the spectacular part of the collapse, but most of the real loss in money wealth had been suffered much earlier.”

“Throughout these years the structure was quietly building itself up for the blow. Germany’s #inflationcycle ran not for a year but for nine years, representing eight years of gestation and only one year of #collapse.” Written in 1974 re: 1914-1923. 2010-2021: Gestation.

“When dollars might as well be falling from the sky…management teams get creative and ultimately take more risk.. paying out debt-financed dividends to investors or investing in risky growth opportunities has beaten a frugal mentality hands down.”

Triffin’s Dilemma. Consider this as China’s GDP passes the US this decade, and US debt forces the debasement of the dollar faster than others. Much like the #FlyingDutchman, the global fiat system must have a captain, no matter how #heartless the transition.

#BTC does not solve Triffin’s Dilemma, as a global fiat economy is relative and requires liquidity on the scale of the largest economies in the world. This is why Switzerland cannot be a reserve currency. The heart of the fiat system goes to the next GDP champion. #flyingdutchman

China with its current policies would not be conducive to the RMB as a reserve currency. However, over the next decade, China’s policies will adapt as it becomes the GDP champion. China’s very efficient and decisive command economy will adjust to its new reality, to its benefit.

People say I didn’t warn last time. I did, but no one listened. So I warn this time. And still, no one listens. But I will have proof I warned.

Consumers do not expect #inflation. This is a chart of the 5- year inflation expectation by consumers, going back to the last big one. Half of us were not alive during the last one. Too, betting on inflation has been a #widowmaker trade on Wall Street.

https://data.sca.isr.umich.edu/charts.php

What he is saying- based on my understanding of the data -is that the US dollar is in a lot of trouble, the economy is unstable, and the events of 2007 are repeating but as he notes, they are in a Weimarian fashion.

He does not say the dirty word, but I will say it here, because I have consistently warned- with great concern -at Shoebat.com about this:

HYPERINFLATION

That is what seems to be alluded to here.

Hyperinflation, or the loss of value in a currency because of overprinting where the money does not represent the value on it but returns to the value of the media upon which it is printed due to a loss of faith in the ability to service debts, is very close. I said that as soon as Trump signed the first COVID relief bill in 2020, that was it, because TARP was now not just for corporations, but the US government was bailing out the common man.

It does not matter if you control the world’s printing press- one can only print for so long until the money is no longer believed to be valuable. It is not just the US, but a cyclical problem in history.

I have warned that one may be wise to diversify to different assets in preparation for such an event, at which time people will either profit greatly or lose about everything they have.

I don’t say that he IS saying this. This is my interpretation of what he seems to speak of, based on the information he has given.

I also don’t want hyperinflation. That would be awful for so many people. It would hurt the whole world. However, as I have also said, I do not see how, mathematically and historically speaking, using both as a guide, another situation is likely going to happen, for while there is a possibility of a deflationary depression still, it would be severe and bound by political choice, and historically, hyperinflation is consistently chosen as it allows governments a way to cause chaos that was going to happen to be blamed on another, usually in the process starting a war, and providing a reason to disown debts and jump-start its economy.

There are more than just a few people who see this.

Think about it carefully, and make good decisions, as the future is likely going to be very interesting.

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