Photo: AP Images
Media-shy billionaire hedge fund manager Stanley Druckenmiller made headlines last Friday when he spoke with Bloomberg TV’s Stephanie Ruhle about a “storm” he sees coming. Druckenmiller, who accurately called the housing crisis, sees another crisis coming due to entitlement transfers.
Basically, he thinks that the seniors in this country are stealing from the young and that could result in a crisis worse than in 2008.
Druckenmiller is one of the best performing hedge fund managers of all time with only one down year.
Now let’s get to know him better.
When he was 28-years-old, he launched Duquesne Capital. He was able to use his economics and equity research background.
Dreyfus had Druckenmiller managing a bunch of their funds while he continued to run his hedge fund.
One of the funds he managed was up 40 per cent in three months.
Source: More Money Than God (p. 149)
In 1992, Druckenmiller is said to have made $1 billion while at Soros by betting on a devaluation of the British pound, according to Bloomberg News.
Druckenmiller executed the trade by shorting the pound by buying up the German mark.
According to Bloomberg, his thought was that the Bank of England would be reluctant to raise rates and its economy was too weak to prop up its currency.
When the British government pulled out of the European Exchange Rate Mechanism, the pound plummeted. Soros Fund Management is credited for the pound being forced to leave the ERM, the report said.
Druckenmiller also bought British stocks betting they would rise because of low interest rates.
In 2000, he returned to running his own fund, Duquesne Capital. He never had a down in year except for in 2010.
In 2010, he announced his retirement and closed his $12 billion Duquesne Capital because he was frustrated he couldn't deliver high returns.
According to Forbes, Druckenmiller has an estimated net-worth of $2.8 billion. He has done a lot with his fortune.
In 2009, Druckenmiller and his wife committed $705 million to the Druckenmiller Foundation, which 'supports medical research, education, and efforts to fight poverty.' The Druckenmillers also donated $100 million to NYU's Langone Medical centre to start a neuroscience institute.
The Druckenmiller Foundation has also donated $25 million to the Harlem Children's Zone. He serves as the chairman of the Harlem Children's Zone's board.
In addition, they have made several other gifts.
Back in 1994, when he was working for Soros, he told some market people and then-Rep. John Kasich what he thought would happen to the bond market if we defaulted on our debt by missing a couple of payments.
He told Bloomberg TV that he found himself in the middle of this budget fight down in Washington, DC.
'I kind of made a mess of the whole experience,' he told Bloomberg TV, adding that the decided he should manage money and keep his mouth shut and stay out of the public eye.
Source: Bloomberg TV
In late 2004 and early 2005, he met with some policy makers with some charts and laid out why subprime was going to be a huge problem for the economy and financial system.
'Apparently they didn't agree with me,' he told Bloomberg TV. 'I sort of always regretted that I didn't go public like I didn in '94 with the housing thing.'
Source: Bloomberg TV
'I see a storm coming, maybe bigger than the storm we had in 2008, 2010. And really, the reason could happen without people looking as for a lot of similar reasons that we could get into. But the basic 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 that is about to hit,' Druckenmiller told Ruhle on Bloomberg TV.
Basically, he thinks old people today are essentially stealing from the younger population via entitlement transfer payments.
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