Associate of George Soros saw the risk of repetition of crisis of 2008


Stanley Druckenmiller, who previously held the post of Director for investment of the financier-billionaire George Soros, said Wednesday at a Conference on investment to them. Ira son to new York that the situation in the world economy reminds him of the pre-crisis period in 2008, writes The Wall Street Journal.

“Bull market” is exhausted, and the responsibility for this lies with the Federal reserve service of the USA, which is in its “short-sighted policy of maintaining low interest rates stimulates risks, he says. The fed “increases the chances of creating a long-tail economic risks, which he so seeks to avoid,” says Druckenmiller.

Among other risks, the investor listed the uncontrolled growth of U.S. debt and even more alarming the situation of China’s economy.

According to him, the American Corporation is stuck in the mud, I forgot, what is economic growth and not wanting to invest money, addicted to share buybacks. Forbes, in assessing the state of Druckenmiller of $4.4 billion, said that for several years the investor is also critical of the strategy of the American market, but now he is really sounding the alarm.

Druckenmiller made such a statement on one of the most respectable meetings of the investors and managers of hedge funds, says The Wall Street Journal. Back in 2005 at the same conference he warned fellow investors that policy Alain Greenspan, then head of the fed, will lead to the bloating of the incredible size of the bubble in the real estate market; when it eventually burst in 2008, the global economy has plunged into crisis. The current bubble “bull market”, which was first inflated by Greenspan’s successor Ben Bernanke, and then and his Russian teammate Janet Yellen, at times worse, said Druckenmiller. Maintaining low interest rates, the fed lowers borrowing costs and thus smooths out the growing problems of the world economy. Included in the S&P 500 corporations, American households and even under state control, China’s economy understand that cheap money is actually borrowing at the expense of future growth, says Druckenmiller. In such a situation, he urged fellow investors to invest in the most, in his opinion, reliable tool — gold.

Druckenmiller isn’t the only investor who warns about the risks of the current policy of the fed. The head of DoubleLine Capital Jeffrey Gundlach compared the policy of the Central banks with the works of Bridget Riley — British painter whose geometric paintings supposedly can cause nausea, writes the WSJ.