Stan Druckenmiller: "I Basically Have a Large Bet on Economic Growth" ~ market folly

Thursday, November 10, 2016

Stan Druckenmiller: "I Basically Have a Large Bet on Economic Growth"

Duquesne Family Office founder Stan Druckenmiller appeared on CNBC today to give his thoughts on the markets and election. 

He noted that after the election a lot of regulation will be taken out of the system which should help get things going.  Other changes like tax reform, especially reducing the corporate tax rate encouraged him as he was "quite optimistic" on the economy.

Druckenmiller said that, "I have a large bet on economic growth ... I'm short bonds globally ... I'm short bunds, I'm short Italian bonds, I'm short US bonds.  I like sectors of the equity market that respond to growth, value, and materials, not things like staples and traditional growth stocks." 

He also added he likes the US dollar, with an emphasis against the euro.  And he has dumped his gold long (he actually sold during the night of the election).  He noted the reasons he previously owned it for 'might be ending.'

Druckenmiller also added, "If it wasn't for the messy conflict of rates rising with the stronger economic growth through fiscal policy, I would think there's so much low hanging fruit in terms of deregulation and tax reform, we could get a jolt of 4 percent growth for about 18 months."

That said, he's also cautious that interest rates rising could push that down to high 2, low 3 percent growth.  "I think the market is going to force this.  The market is going to push them to raise interest rates if my hopeful scenario turns out to be right."

He added that monetary policy essentially helped get Donald Trump elected as it caused a 'massive reallocation' of wealth from the middle class to the rich.

"Dr. Copper: have you seem him lately?  It's been rising.  Interest rates have been at stupid levels, they've been held down... they're like beach balls under water."

Embedded below are some of the videos from Druckenmiller's interview on CNBC

Video 1

Video 2

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