Posted on 07/23/2021 12:48:24 PM PDT by blam
This isn’t the first time billionaire investor Stanley Druckenmiller has warned that US markets are caught up in a “raging mania” fostered by the trillions of dollars in government spending. Druck, an acolyte of George Soros known for his macro investing prowess (even as he complains that contemporary Fed-backstopped markets “make no sense”) is a frequent guest on CNBC. But on Friday morning, he made a brief appearance on MSNBC’s Morning Show with Stephanie Ruhle, who seemed ill-equipped to respond to Druck’s arguments about why the Dems’ multi-trillion two-part infrastructure plan will end up hurting America’s poorest citizens.
Druckenmiller
As Druck explains, the “V-shaped” economic recovery has been “the sharpest recovery in history,” noting that it took 10 years for the American economy to achieve the same gains following the start of the Great Depression.
The problem is that the nearly $6 trillion allocated by Congress to combat the economic impact of COVID has been spent after the economy already finished recovering. The accelerating pace of inflation, and inability of certain businesses to hire lower-wage workers, are but byproducts of this.
Source: Committee for a Responsible Federal Budget
Moving on, Druck pointed out that the biggest economic crises of the last 100 years have largely been caused by asset bubbles and inflation. “Inflation is a tax the poor can’t afford or avoid,” Druck added.
Any further stimulus spending is intended to fix a problem that, in Druck’s words, “doesn’t exist anymore.” He added: “If I was Darth Vader and I wanted to destroy the US economy, I would do aggressive spending in the middle of an already hot economy.”
“You usually get a bubble out of that, and you get inflation of of that. Frankly, we now have both. This is the biggest bubble I’ve seen in my career.”
And it’s not just stocks: Druck pointed to the state of crypto and housing markets.
“What are we going to get out of this? You’re going to get a sugar high, the higher inflation, then an economic bust,” Druck warned.
When Druck added that he would prefer Dems postpone their infrastructure spending plans (even though he said he supports many of the provisions of the Demcoratic plan, including improving high-speed infrastructure access in rurual areas), Ruhle interjected. Poor people don’t care about bitcoin crashing, since they don’t own that much bitcoin (or stocks) anyway. But the infrastructure plan will help all Americans, especially those with the fewest resources, Ruhle argued.
“I dont think we need to do anything, we need to take a step back take a breath and see where we are…I think any net spending is a problem. I love a lot of stuff in the infrastructure plan particularly the investments int he digital infrastrucutre. There’s a lot of other stuff im okay with.”
First of all, Druck argued that the growing retail exposure to equities means a market crash will impact main street even more quickly this time around. And even if they own no financial securities or crypto assets, they will still be impacted by the economic declines, as Druck explains: “It’s going to cause a financial crisis, it’s going to cause inflation and nothing is going to hurt the poor more than that.”
Trading Places, We are Commodity Brokers
https://www.youtube.com/watch?v=sENssnI9CGc
Trading Places: Sell!
https://www.youtube.com/watch?v=obAoPP1bdIM
Why are they paying me 3 times in social security payments over what I paid in, counting for inflation? I began collecting at 62, now at 81 still healthy as a race horse and could easily outlive my 103 year old mother.
SS paid for my 2 under 18 age kids for many years, more than my monthly check. Why?
I’m only 50, so I can’t answer your question.
You have 31 years of living in America, that I can only read about.
My maternal grandfather(1916-2016) almost made a 100. His body and mind were solid till the last day of his life.
Take care and congratulations on your excellent genes, not every family has them.
Hell....I get in and out in days.
Why do you think they are trying to purge the military of anyone who would refuse orders to mow down American civilians? They know what they are creating.
Gloom and doom scenario. No doubt inflation will get worse, but I don’t see the a market meltdown in the near term. Stocks are one of the few investment options that earn a reasonable ROI. Yes, the equities markets will go up and down, but a collapse? I’m not worried...yet.
i don’t get this talk of MASSIVE UNPRECEDENTED bubbles in securities ...
when biden stole office, the Dow was at about 31,000; today it’s about 35,000, about a 13% increase ... whether that’s warranted or not who knows, but it’s NOT some gigantic MASSIVE UNPRECEDENTED bubble price that’s gonna come crashing down because it’s some gigantic MASSIVE UNPRECEDENTED bubble price ...
https://www.google.com/search?q=djia
*HEART* :)
The stock market could have a 15% swing either way for the next 12 months, and you still have a solid market.
Don’t believe the media hype, just calmly analyze different trends and invest accordingly.
Good post BTW, catnipman.
Republicans must take seriously the effort by Democrats to completely change America through the Reconciliation Process. Democrats are now suggesting that budget reconciliation can be used to pass Mail-In Ballot legislation as well as trying to include Amnesty in their infrastructure package....Any effort to dictate national Mail-In Voting will be a disaster for our Country and for conservatism. There will never be a Republican elected to high office again. I urge every Republican to fight this and deny Democrats a quorum if that is what it takes to make sure that the Democrats can’t use reconciliation.
If the RATs manage to Nationalize elections then America Dies.
Ha. I don't know.
Most of this kind of stuff I post is because I'm looking for answers from you all myself.
I think brass and lead are far more useful.
Even gold cannot buy what isn’t there. And you can’t eat it.
My neighbor called me yesterday and informed me that he was giving my younger brother most of his guns and ammo. He's so old and didn't want to leave them with his Chinese wife when he dies. She's 25 years younger than him.
He would have given them to me but (ahem) I'm older than him.
.
Good for him.
That’s a well thought out plan rather than leaving them to someone who would just turn them in to the authorities or destroy them.
“...because I’m looking for answers from you all myself.”
It feels like the best strategy these days is to keep our cards close to our vest, and to keep our powder dry! ;)
They leave them out because it is stupid to include them in counting debt. When you look at your debt, do you include every dollar you will spend for the rest of your life, not accounting for any income? of course not, because that would be stupid.
You are absolutely correct and its a point I have made numerous times on FR but not sure that people were believing it so I kind of gave up with attempting to be precise. The unfunded liabilities are so obscene I can understand why some may have trouble grasping the magnitude and implications of this enormous, unsustainable burden.
Every dollar I am committed to spending?
Yes. That needs to be accounted for as well.
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