Renowned billionaire hedge fund manager Stanley Druckenmiller says he could see cryptocurrency “having a big role in a Renaissance because people just aren’t going to trust the central banks.” He added that he will be “stunned” if the U.S. isn’t in a recession next year.
Stanley Druckenmiller: People Just Aren’t Going to Trust Central Banks
Stanley Druckenmiller, a billionaire investor, spoke at Wednesday’s CNBC Delivering Alpha conference about the U.S. Economy and Cryptocurrency. Druckenmiller serves as the CEO and chairman of Duquesne Family Office LLC. Prior to joining Duquesne Family Office LLC, he was a managing director for Soros Fund Management. He had responsibility for funds that have a maximum asset value of $22 Billion. According to Forbes’ list of billionaires, his personal net worth is currently $6.4 billion.
Referencing the news of the Bank of England buying 65 billion pounds of U.K. bonds, he said “if things get really bad” and other central banks take similar action in the next two or three years:
I could see cryptocurrency having a big role in a Renaissance because people just aren’t going to trust the central banks.
However, he revealed that he does not own any bitcoin or other cryptocurrencies, adding, “it’s tough for me to own anything like that with central banks tightening.”
Focusing on the U.S. economy, Druckenmiller stressed that the Federal Reserve was “taking unbelievable risks.” He emphasized, “We’re taking this massive gamble where you threaten 40 years of credibility with inflation, and you’re blowing up the wildest raging asset bubble I’ve ever seen,” asserting:
The Fed made a mistake. The Fed made a huge mistake.
“If you remember, the Fed did $2 trillion in QE after vaccine confirmation,” the billionaire explained. “At the same time, their partner in crime, the administration, was doing more fiscal stimulus — again, post-vaccine, after it was clear emergency measures weren’t needed — than we did in the entire great financial crisis.”
Druckenmiller continued: “If you look at what the Fed did, the radical gamble they took to get inflation up 30 basis points from 1.7 to 2, it’s, to me, sort of a risk-reward bet … And they lost.”
He elaborated: “And who really lost? Poor people in the United States, ravaged by inflation, the middle class, and my guess is the U.S. economy for years to come because of the extent of the asset bubble in time and duration and breadth it went on.”
Druckenmiller discussed whether the U.S. will experience a recession.
Just a few words. I will be stunned if we don’t have a recession in ’23. Don’t know the timing, but certainly by the end of ’23.
In a subsequent interview with Bloomberg Wednesday, the Duquesne Family Office CEO reiterated that Federal Reserve policymakers “have put themselves and the country, and most importantly the people of the country, in a terrible position.” He warned that “Inflation is a killer,” noting that “To maximize employment over the longer term, you need to have stable prices.”
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