'Big Short' investor Michael Burry warns the US economy is on borrowed time — and consumers will blow through their savings in a matter of months

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, according to Michael Burry.

He wrote "Charting total US personal savings/GDP." The all-time low for the red line is 1.5%. Between September and December, the rate of savings depletion could hit that level. Time being borrowed.

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

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, according to a new report.

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 if the hedge fund manager is correct.

In the last few weeks, Burry has warned on the social networking site.

He warned that Americans' dwindling savings, ballooning credit-card debts, and reduced savings rate could cause trouble for the economy. He said that a consumer recession and more earnings trouble were the reasons for loot.

During the Pandemic, US consumers benefited from forgivable loans, cash out refinancing offers, and indirect fiscal support. He wondered how they could rebuild that wealth now that inflation, interest rates, and asset prices are hurting household finances.

The collapse of the housing bubble was predicted and profited from by the chief. He accidentally laid the groundwork for the meme-stock craze when he invested in GameStop before its stock skyrocketed.

Predicting disasters is one of the things that burry is known for. He sounded the alarm on the "greatest speculative bubble of all time in all things" last summer and warned buyers of cryptocurrencies that they were facing the "mother of all crashes."

The current market downturn is similar to the housing bust that made him famous. It is similar to watching a plane crash.

@michaeljburry