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‘Big Short’ Michael Burry Warns of Prolonged Inflation with Expanded Ukraine War, Continued Supply Chain Issues

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Michael Burry, of “The Big Short” fame and founder of the hedge fund Scion Asset Management, took to Twitter again to share his gloomy economic views, a possible expanded Ukraine war and continued supply chain disruptions, which would all lead to raising “the lower bound of the long-term inflation rate.”

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In a now-deleted tweet, Burry wrote that “Seems China moves on Taiwan in 2023, as the war in Ukraine spreads into the EU, maybe via Lithuania. Onshoring/blue collar shortages plus global supply chain restructuring raise long-term inflation’s floor even as the bullwhip cycles lower to that end,” according to Bloomberg. Burry also added a link to a Bloomberg article about “US factory boom heats up as CEOS yank production.”

Burry usually deletes his tweets shortly after they’re posted. 

On June 27, Bloomberg reported that Burry tweeted that the “Bullwhip Effect” may cause the Federal Reserve to pause rate hikes and on July 1, he tweeted that the stock market might be about halfway through its decline, according to the New York Post. 

Linking to a CNN article about stores weighing paying you not to bring back unwanted items, Burry wrote:  “This supply glut at retail is the Bullwhip Effect. Google it. Worth understanding for your investing endeavors. Deflationary pulses from this- -> disinflation in CPI later this year –> Fed reverses itself on rates and QT –> Cycles. https://t.co/PHCgoOOvlD,” Burry tweeted. 

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According to MIT Sloan Management Review, the “bullwhip effect” in a supply chain is “distorted information from one end of a supply chain to the other can lead to tremendous inefficiencies: excessive inventory investment, poor customer service, lost revenues, misguided capacity plans, ineffective transportation, and missed production schedules.” 

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