I have uploaded a market update for December 20, 2018. Click here to go to the show archives page to listen or you can listen on the link below. You can also right mouse click here to download the podcast.
Note: Druckenmiller does not understand the conspiracy like we do. He sees the US Fed policy as seriously misguided, but we see it as intentional. He does know that the Fed always gets it wrong and waits to benefit from the resulting asset busts. Interview date; December 18th.
-Analysis and commentary of the in-depth Stanley Druckenmiller interview on Bloomberg.com
-From beginning of interview to about the 5:00 mark; Something’s not right with the economy and the Fed is tightening into weakness
-Eight years of free money and the Fed encourages the reach for yield. Pulling back late in the cycle.
-Around the 12:00 minute mark; If the Fed continues to act hawkish and raise rates without pausing, financial rot may not have time to surface. If and when it does the Fed will have to act in a much more drastic fashion. Druckenmiller says 5x or 10x as much.
-Imagine the types of programs the Fed will conjure up after things really fall apart again. The Fed is setting the stage for more unconventional monetary policy as the answer to the crisis it caused.
-Druckenmiller marvels and wonders what the Fed is looking at in their analysis as they always get it wrong.
-Powell is the white goyum. He will get the blame.
-I tell you it is done by design. Druckenmiller says he looks to the bear market busts as opportunities to increase his wealth and we should, too. The eiltes engineer these boom/bust cycles to consolidate their wealth.
-Fed looks at inflation and unemployment (both considered lagging indicators) to formulate policy.
-The level of the Fed funds rate is less important than the rate of change. He says that the Fed should have started raising rates much sooner.
-The balance sheet unwind is the most troubling as the Fed is executing it on auto-pilot.
-He says that Powell is setting us up for a deflationary bust. When things fall apart we need to stand ready and act.