Wall Street Legend Stanley Druckenmiller Warns Stock Market Rally Coming To End, Financial Storm Coming

Well-known investor Stanley Druckenmiller is warning these days that not only is the stock market rally coming to an end, but that a financial crash is fast-approaching. For those of you not familiar with Druckenmiller, from the Forbes magazine website:

• Started Duquesne Capital Management in 1980 with $1 million. Closed down $12 billion hedge fund in 2010 “and returned investors’ money, citing frustration with his inability to deliver high returns.”
• Hired by legendary investor George Soros in 1988 and together the two reportedly made $1 billion in a day by shorting the British pound in 1992
• Went back to running Duquesne in 2000, which reportedly made money for its clients during the 2008 global economic crisis
• His estimated net worth in March 2013: $2.8 billon

Yesterday morning, Druckenmiller appeared on CNBC’s Squawk Box. Discussing the recent performance of equities, he told viewers:

You’ve got a great supply-and-demand situation for stocks right now. But, I’d analogize it to the hamster on the wheel. It was easy to know when QE1 and QE2 were going to end. This thing will probably end, even though I think QE is going to go on forever just because all the lobster are about to get in the pot. And maybe we’re in the 7th or 8th inning. But, they’re going to get boiled at some point. But right now, supply-and-demand looks great.


“Druckenmiller: Don’t Know When, But It Will End”
CNBC Video

Last Friday, Druckenmiller sat down with Stephanie Ruhle on Bloomberg Television’s Market Makers. He warned viewers of an approaching financial “storm,” stating:

Currently, Stephanie, I see a storm coming. Maybe bigger than the storm we had in 2008 to 2010… The basic story is, the demographic bubble I was looking at way back in ‘94 that started in 2011. We are right at the first ramp-up of this thing…

Something remarkable has occurred since 1994 until now, which is entitlement spending. Or let me say transfer payments, to be a little more correct. Transfer payments which were 28 percent in ‘60. And were 50 percent when we were in the budget mess in ’94. Lo and behold, they’ve gone up to 67 percent of government outlays. But, they haven’t gone up because of demographics. They’ve gone up because the seniors have a very, very powerful lobby. They keep getting more and more transfer payments from the youth. But the demographic storm is just starting now…

So, what’s going to happen, we now have a working popular of- this is how entitlements work- where the current workforce is paying for the benefits of the seniors. Since 2000, we’ve have about 4.5 to 4.8 workers for every retiree. By 2050, that number will drop to 2.4 workers per retiree. Another catchy way of saying it is that by 2030, the average population of the United States is going to be older than the average Floridian right now.

Druckenmiller later said that he’s not out to bash senior citizens, but instead:

What I’m against is current seniors stealing from future seniors.


“Druckenmiller: I See Storm Coming, Bigger Than 2008”
Bloomberg TV Video

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

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