S&P 500 ^GSPC 5,316.93 -0.08%
Tesla TSLA $179.81 -3.64%
Meta META $470.75 +1.32%
Alphabet GOOG $177.38 -1.20%
Nvidia NVDA $947.46 -0.67%
Apple AAPL $191.38 -0.51%
Microsoft MSFT $430.41 +0.32%
Amazon AMZN $183.21 +0.03%

An urgent warning from a well-known billionaire and manager. Why is he convinced that the markets will soon fall to…

Jamie Cameron
14. 11. 2022
3 min read

Stanley Druckenmiller has long been a critic of the Fed's actions. But now he argues that the central bank's behavior could spell total market apocalypse.

Stanley Druckenmiller is increasingly skeptical

Billionaire investor Stanley Druckenmiller believes the Federal Reserve 's efforts to quickly eliminate the excess spending it has created through decades of loose monetary policy will not end well for the U.S. economy.

"We anticipate a really hard landing by the end of 2023," Druckenmiller said. "I'll be stunned if we don't have a recession in '23. I don't know the timing, but certainly by the end of '23. And I won't even besurprised if it's a recession that we haven't seen before."

That's a scary thing to say coming from a guy who had an average annual return of 30% from 1986-2010. He's even considered the best of the "unknown investors on Wall Street."

https://www.youtube.com/watch?v=BtMNls7O3FY

Druckenmiller believes that the extraordinary quantitative easing and zero interest rates of the past decade created a bubble in asset markets. "All of these factors that fueled the bull market have not only stopped, but each of them has actually started to reverse completely," Druckenmiller said. "We have a huge problem of problems."

Indeed, interest rates in the world's largest economy have been extremely low for a long time. Source

The Fed is now in the midst of the most aggressive pace of tightening since the 1980s. The central bank has raised rates by three-quarters of a percentage point several times in a row and promised further increases to beat inflation, sparking a major sell-off in risky assets. The S&P 500 index is drowning in investor blood.

https://www.youtube.com/watch?v=PB-D4KDifJM

The investor said the Fed made a policy mistake when it came up with the "ridiculous theory of transience" thinking inflation was driven by supply chain and demand factors that are largely linked to the pandemic.

"When you make a mistake, you have to admit you were wrong and move on to sitting around for nine or 10 months and buying $120 billion of bonds," Druckenmiller said. "I think the consequences of that are going to haunt us for a long time."

The index is sinking deeper and deeper

Druckenmiller once ran George Soros' Quantum fund and became famous for making a $10 billion bet against the British pound in 1992. He later oversaw $12 billion as president of Duquesne Capital Management before closing his firm in 2010.

If you enjoy my articles and posts, feel free to throw a follow. Thanks! 🔥

Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and a few other analyses. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.

Read the full article for free?
Go ahead 👇

Log in to Bulios

Log in and follow your favorite stocks, create a portfolio and discuss with others


Don't have an account? Join us

Pass the article on, or save it for later.