Billionaire Super-Investor Blasts Fed

Billionaire investor Stanley Druckenmiller didn’t mince words when asked for recommendations at the Sohn Investment Conference.

Sell US stocks. Buy gold:

The conference wants a specific recommendation from me. I guess ‘Get out of the stock market’ isn’t clear enough.”

Druckenmiller went on to sing gold’s praises:

Let me throw this one at you. My hint is what is the one asset you did not want to own when I started Duquesne in 1981? It’s traded for 5,000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates. Some regard it as a metal. We regard it was a currency, and it remains our largest currency allocation.”

Druckenmiller also blasted the Federal Reserve, echoing a point Peter Schiff has made about the Fed’s so-called “data dependence” being a farce. He added that Federal Reserve “myopia” leads to “reckless behavior:”

I have argued that the myopic policymakers have no end game. They stumble from one short-term fiscal or monetary stimulus to the next despite overwhelming evidence that they only produce a sugar high and grow unproductive debt that impedes long-term growth. Moreover, the continued decline of global growth despite unprecedented stimulus the past decade suggest we have borrowed so much from our future and for so long that the chickens are now coming home to roost…By most objective measures, we are deep into the longest period ever of excessively easy monetary policies. Despite finally ending QE, the Fed’s radical dovishness continues today. By most objective measures, we are deep into the longest period ever of excessively easy monetary policies. In other words, and quite ironically, this is the least ‘data dependent’ Fed we have had in history.”

Peter has argued for months that despite government officials’ and central bankers’ persistently optimistic economic analysis, the actual data is flashing warning signs and that the US may well have already entered recession territory.

According to CNBC, Druckenmiller argued that US corporations haven’t even put the “easy money” to good use:

He believes US corporations have not used debt in productive investments, but instead relied on financial engineering with over $2 trillion in acquisitions and stock buybacks in the last year. This is finally showing up on the books of companies as operating cash flow growth in US companies has gone negative year-over-year, while net debt as gone up, according to the investor.”

The bottom line, in Druckenmiller’s view, “The bull market has exhausted itself,” after eight years of “radical monetary experiment.”

As Druckenmiller said, now is the time to buy gold, and you can do so while maintaining your privacy. You just need to understand the rules. SchiffGold’s Guide to Tax-Free Gold & Silver Buying will help you navigate the IRS regulations.

Reprinted from SchiffGold.com.

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