Burley just dropped a bombshell on one of the most shocking crises of all time time just like 1999 and 2008. Nobody knows what bury sees. But the world is to wake up soon in bury's own words. The theater took more than a decade to overstuff not likely everyone gets out in less than a year.

While it took ages for the theater to be stuffed with millions of people the collapse will be quick and painful some people are inevitably going to be left behind. And it's going to be their fault for not catching on even. Though. The signs have been there for years.

Investors worldwide will still be in for a rude awakening. Everyone knows that the government messed up. But that's not what i'm about to tell you the federal reserve printed 5 trillion dollars and this unsurprisingly led prices to rise the inflation rate is currently at 86. Percent.

As a result of this contrary to the mainstream media brewery. Doesn't think that inflation is going to remain elevated in the short. Term it's true that the fed printed at an annual rate of 15. Trillion dollars during the pandemic.

But the opposite is now playing out. The fed is planning to cut the money supply at an annual rate of 11. Trillion. Dollars.

If prices rose after the fed printed trillions of dollars. It's logical to assume that prices will drop after the fed pulls back trillions. This is happening at the same time that supply chains are catching up to demand supply chains have been under pressure over the past couple of years. But this is starting to change.

The world hasn't been sitting back and letting the pandemic gloom over it's in our nature to adapt to the changing environment. New supply chains have been set up businesses have been becoming more efficient more container ships are being built the supply panic is on full speed by all means one shipping analyst said that last week 13 more container ships were ordered bringing the total for the year to 239. This is already the fifth largest year on record for container ship orders and we are only halfway through the year such a large increase is obviously not sustainable. Another analyst explained.

How the size of the outlook is obviously a reason for concern. We're starting to see the scramble to produce supply in the growth of inventories wholesale inventories are up 24 year over year the problem with this newfound supply is that consumers are not spending as much consumer sentiment. Is at a one and a half decade low according to the u michigan consumer sentiment index. When you have an oversupply of goods and low consumer demand prices are bound to drop at a rapid pace.

Bury tweeted. Question in 2022. What brings a christmas in july answer a disinflationary overstocked consumer recession at christmas. Bury is hinting at an upcoming supply glut.

A supply glut is when retail stores suddenly have far too much supply and not enough demand as a result of a supply. Glut retail stores will have to start dropping prices by introducing mass sales. That's what burley means. When he says that christmas will come early in july christmas sales.

Always happen because businesses produce too many goods that need to be sold the only way to sell those goods is by dropping the price july 2022 will be an early christmas and not for a good reason. When there are too many goods on the shelves. Corporate profits will drop immensely. Which will eventually cause people to be laid off or see their salaries cut burry expanded on this concept by saying.

This supply glut at retail is the bullwhip effect google. It worth understanding for your investing endeavors deflationary pulses from this lead to disinflation in cpi. Later this year. Which then leads to the fed reversing itself on rates and quantitative.

Tightening and this leads to cycles of that occurring again. The bullwhip effect. Is when a spike in demand causes. The suppliers to order too much supply.

This is because businesses tend to order a little more supply than needed as a safety net. The problem with this is that when there's a chain of businesses. All ordering extra orders. The supply can be magnified to unhealthy levels.

The supply chain typically includes retailers wholesalers and manufacturers as you can see in this demonstration. Each step of the supply chain over ordering ultimately leads to access orders. This is similar to a bull whip. Hence.

The name the bull lip effect. Let's say a walmart store typically sells around 30 boxes of cereal per day. Because of a new social media trend serial sales have increased drastically in the short term. Instead of selling the typical 30 boxes of cereal.

Let's say. The walmart store is now selling 90 boxes of cereal per day as a result of this increase in demand walmart will now order cereal at a rate of 150 boxes of cereal per day this. Gives. Walmart 60 extra boxes per day just in case.

The demand increases at any point in time general mills now receives walmart's order of 150 cereal boxes per day this spike in demand will now lead general mills to order 250 cereal boxes per day the cereal manufacturer will now see 250 orders and increase production to 350 cereal boxes per day throughout this process. We went from 90 boxes of cereal to 350 not only do we have 260 extra boxes of cereal per day. But the short term spike in demand could also dissipate at any point in time because there was a sudden increase in the supply of cereal businesses across the supply chain will have to cut prices. This causes.

The opposite of a supply glut retailers will now order less supply. Once the cereal supply. Inevitably runs out businesses will once again be left scrambling to get their hands on cereal cereal prices will skyrocket once again causing retailers like walmart to order more cereal this brings us back to square one we are currently experiencing the bullwhip effect on steroids retailers have ordered boatloads full of supply as a result of the unprecedented supply shortage. This has led to one of the biggest bullwhips in history and when there's a bullwhip a supply glut is inevitable brewery knows our incoming supply glut will cause deflationary forces that lead to disinflation this inflation is when the inflation rate slows down dramatically.

So instead of inflation continuing to accelerate like many think inflation will actually decelerate soon because of incoming disinflation from the bullet effect. The fed may start printing money again which is better known as quantitative easing quantitative easing will then boost consumer demand and cause another supply shortage because of the supply shortage. The fed will then pull money out of the system to stop inflation also known as quantitative tightening. The only problem is that retailers will once again order extra supply and cause the bullwhip effect again when there's too much supply prices will drop and cause the fed to start quantitative easing again this would artificially increase consumer demand and lead to a supply shortage which only sets the stage for another bullwhip such a cycle is frightening.

Because it causes the economy to be stuck in recurring bullwhips. We are currently in the bullwhip portion of this cycle and as a result we'll experience one of the worst crashes in history. The bullet effect is simply caused by human nature and cannot be stopped regardless of how well known it is bury elaborated on the bullwhip effect by saying across the economy. Different verticals are in different phases at the same time but fundamental equity investors are rarely looking at more than one vertical at a time brewery is essentially calling for a massive bullwhip across the entire economy.

This means that the bullwhip doesn't just include retail stores like walmart and target. It could also include other industries ranging all the way from plane manufacturing to cell phones attached to bury's tweet was a website. Describing the beer game contrary to what you might be thinking the beer game has nothing to do with drinking beer. The goal of the beer game is to simulate the supply chain of beer.

There are four units in the game. The retailer wholesaler distributor and brewer. Students in the game are split up into four groups with each group being a unit. The goal of each unit is to obtain the highest profit possible at the end of the game.

It is almost always the case that inventories end up being too high this is because each of the four units always order extra beers. Which magnifies the end results the beer game. Proves that the bullet effect is simply human nature retailers are already seeing the bull up effect at play right. Now.

Walmart's inventories in the first quarter of 2022 were up 33 year over year home depot's inventories were up 32 percent this happened while walmart home depot and target all saw their sales increase by only two to four percent year over year. The retailers inventories are increasing ten times faster than sales. Which is an obvious sign of the bullwhip effect as mentioned before the bullet effect doesn't just happen once every decade. It's a recurring cycle.

That only worsens over time with prices mainly going upwards over the long term brewery tweeted january 1973. President johnson died foreman beat fraser and roe v. Wade the dow jones hit its highs for the 1966 1982 period as cyclical inflation reduced the spending of the dollar to just 35 cents. There was never a deflation to reverse that now 10 cents the cycle of bullets caused prices to go up and down periodically.

But at the end of the cycle. There was one last price search that never saw its downward counterpart so while prices oscillated they ended up being elevated in the long term attached to bury's tweet was a graph showing the inflation rate in the 1970s. You can clearly see how the inflation rate was moving up and down in a cyclical fashion. Which perfectly demonstrates.

The bullwhip effect at play over time. The bullet effects got bigger and bigger with the inflation rate. Always being positive prices throughout the 1970s rose dramatically and they never went back down because inflation remained significantly positive the last surge in the inflation rate. Never went back down to the two percent rate that happened in the first bullwhip.

Bury explained further by saying transitory. No peak no to the moon. If you mean a cold dark place at the bottom of his tweet was an article describing how prices went up so much that nobody wanted to purchase bonds anymore. The cpi news.

This morning was so awful that it changed the bond market's view of fed trajectory and the weakest sector broke in bond jargon mortgage backed securities went no bid no buyers for mortgage backed securities the financial markets typically work with bids and asks the bid is the price that buyers are willing to pay. And the ask is the price that sellers are willing to sell this creates a spread between the two prices. A market maker like citadel. Will then purchase the asset at the bidding price and sell it at the asking price essentially making money from the spread inflation was so high in june that there were no bids for mortgage backed securities.

This means that there was literally no price that buyers were willing to pay for on mortgage. Backed securities. Which are bonds that are secured by home loans this is a terrifying signal showing that inflation is likely here to stay this is because even. Though.

The fed is trying to stop inflation. Not everyone is on the same page. Bury tweeted. An article announcing the inflation relief payments that californians will receive.

This is ridiculous. Because giving free money is only going to make inflation worse. He ridiculed california's behavior. By saying that is not how this works that is not how any of this works we're clearly in a frightening economic environment.

But there must be light at the end of the tunnel bury doesn't see this light coming anytime soon. He tweeted. A quote by billionaire businessman. Tom siebel.

I don't think this is going to be over until everybody swears. They will never own crypto and they will never own a technology stock burry added his own comment. By saying. Such was assigned in 2002.

1932 and 74 09. Was a panic bottom. But 07 not a speculative peak in stocks. We experienced a speculative peak in 2021 and speculation typically ends with everyone scared of speculative assets.

We're currently not there yet at the moment bitcoin an asset that brewery despises is still relatively popular right now burry tweeted a graph showing the correlation between nasdaq and bitcoin and questioned are we sure bitcoin is not just another risk asset in the nasdaq 100. The strong correlation between bitcoin and the nasdaq shows that bitcoin isn't an uncorrelated asset. The facts that bitcoin's price fluctuates in a similar fashion to the nasdaq shows that it is simply just another tech stock with a new name. Some people like jim kramer might point toward a short term rally as a sign of recovery.

But brewery knows that short term rallies happen the most during market crashes. It might sound contradicting to have the biggest rallies during market crashes. But history has shown that to be the case brewery tweeted. Who knew this year was so much fun because of all the doomed rallies recall to 1929 1932.

Top to bottom 10 rallies above 10 averaging 23 percent. 2 000. 2002. 16.

Rallies above 10 percent averaging. 23. So every year. We have a massive multi year crash there are plenty 10 to 25 percent rallies.

However you shouldn't mistake. Those rallies as a sign of long term market recovery short term rallies. Mean nothing during a bear market. So with that being said.

How is berry preparing for the incoming crisis people can say whatever they want. But if the money isn't where the mouth is then they're simply bluffing for attention. Unlike other market crash predictors buries money is certainly. Where his mouth is that being said his positions are more complicated than you might think that's why i'm going to release another video analyzing how he's about to make hundreds of millions of dollars in the coming crash you're going to be surprised at what i have uncovered and buries unique and convoluted strategy make sure to hit that subscribe button.

So that you don't miss out on my next video analyzing bury's portfolio. If you enjoyed this video. Please hit the like button as well thank you for all your support and i'll see you in the next one you.