“This Is The Biggest Bubble I’ve Seen in My Career” – Dems’ Infrastructure Spending Could Lead to Devastating Crash, Druck Warns
The comments below are an edited and abridged synopsis of an article by Tyler Durden
Billionaire investor Stanley Druckenmiller (Druck) has warned that US markets are in a ‘raging mania’ fostered by trillions of dollars in government spending. He recently appeared on MSNBC with Stephanie Ruhle, who seemed ill-equipped to respond to Druck’s arguments about why the Dems’ multi-trillion infrastructure plan will end up hurting America’s poorest citizens.
As Druck explained, the V-shaped economic recovery has been the sharpest recovery in history; it took 10 years for the American economy to achieve the same gains following the Great Depression.
The problem is that the nearly $6 trillion allocated by Congress to combat the economic effect of Covid was spent after the economy had recovered. The accelerating pace of inflation, and inability of certain businesses to hire lower-wage workers, are by-products of this.
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,” he said.
Any further stimulus spending is intended to fix a problem that doesn’t exist anymore. And it’s not just stocks: Druck pointed to the state of crypto and housing markets.
Druck said that the growing retail exposure to equities means a market crash will affect Main Street even more quickly this time around. Even if Americans own no financial securities or crypto assets, they will still be affected by the economic declines: “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.”