Stanley Druckenmiller: Total Debt Could Be $211 Trillion [VIDEO]

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of the country. what are we going to end up cutting if we don’t touch medicaid, social security, and medicare? we’re going to cut education. we’re going to cut all of the research and investments that we need to keep our economy booming. this is just not fair. and this has nothing to do with whether or not you’re a democrat or a republican. it has everything to do with whether or not you love this country and you believe that we should have an america where every young person has an equal access to make it in this country. when you view it that way, you view — that was very — when you realize you’re getting $48,000. you’re on that list that i saw yesterday from forbes. why are we spending the $48 billion giving it to you when you can’t spend it on everything. i don’t know how to fix education. you run a charter school. we have to reform the way education — that we’ doing it. wait a minute, let me tell you what i’ve learned from thi president. did you going to argue for your $48,000? no, i’m not. take it away. but it isn’t going to work if we appeal to old people to be fair. it isn’t going to work. the president has proven that if you appeal to people on the basis of something in it for them, you got ’em. now bush — romney said a lot of things i don’t agree with. but this he said was right. you’re not going to get people to vote against you if they’re getting something by voting for you. we’re not going to solve the problem. as a matter of fact i’m speaking next month and i’m going to do it for the first time. i think we’ve got to energize these kids in college to understand that they’re being ripped off. and we’ve got to pull them together, and have them become a political force to say you’ve got to change this. and as they come into the voting age, that’s the ultimate — they are a political force, though. and this is — for the last eight years. let’s not kid ourselves. this is bipartisan. absolutely. entitlements grew more under nixon, ford and george w. bush than any democratic president. and what’s interesting is these young people, everybody says they can’t look that far ahead. that’s not true. they are fanatnd rightly so about where the environment is going to be in 40 years. so, the thought that the young people can’t envision the world 40 years from now is ridiculous. it’s no different than the environment. it’s current consumption versus future consumption and if they can get motivated on the environment they really ought to get motivated on this. i’d like to see 40 million of them walking down to washington on this issue. you know, this man has moved heaven and earth, i’ve been with him about 20 years. a little more. 100 square blocks in harlem to give — to level the playing field and give these kids the same chance that we in the room had when we started out. and i have seen him look these kids in the eye, these 3 and 4-year-olds right out of the lottery and tell them, if you work hard, and you do what we say, i’m g to get you through college, and then you’ll have a job when you get out. the reason he’s going a little nuts right now is for the first time, looking forward, if he fulfills his mission, we’re worried that that job may not be there if they handle their part of the bargain. and we’re frustrated. that’s right. that’s exactly right. this is really, i think, about equity and fairness. and the problem isn’t — and this is — i find that i would never bet money betting against ken langone, all right? but this is one thing. we have let our political leaders off the hook. right? as if we can’t trust them to tell the truth. everybody’s thrown in the towel. they’ll never be honest, right? so we’ll have to do this some other way and i think that’s wrong. i think that it’s time to really say that we’ve got to get the political leadership to have the courage to say that whether you’re a democrat or a republican or the president of the united states, what’s happening with these entitlements are robbing from the poorest and most disadvantaged kids, and then we as americans shouldn’t allow that to happen. there’s one — don’t expect courage out of politicians. okay? because all they care about, frankly, for the most part, is getting re-elected. and this is why i think we’ve got to get on it in a political way. we’ve got to energize these kids from colleges to understand that we want to help them. those of us that feel i shouldn’t get it but we need to energize these kids to go after the other side. we’re going to continue this conversation in just a moment.

we’re wrapping up our panel. our distinguished panel. and we’re going to talk what to do here. stan druckenmiller, former chairman and ceo of duquesne capital management. ken langone co-founder of home depot. geoff canada is president and ceo of the harlem children’s zone and kevin harsh, former fed fellow. we’re out of time after that intro. no. actually, we talk about all these things, and it’s — hopefully policymakers will listen. hopefully, the public will listen to this. but, in the meantime, where we are right now, you’ve called up friends in the past. you’re one of the great investors of all time. i saw you’re name. you’re like in the top 20 or something on that forbes list. what’s an investor to do in macro — joe, didn’t you say i was former head of duquesne? you know i retired so i didn’t have to answer questions like that. but you’re so smart. one thing i’m not is smart. look, here’s my problem. the fed is printing a lot of money. they are forcing people into markets. you shouldn’t be buying securities because you’re forced to buy them. by zero rates. you should buy them because you think they’re great value. they’re great value only relative to zero interest rates. they’re not great value on an absolute basis. having said that, the party’s going on, money’s being pumped in, as i said early, supply and demand is good, so i think this party can continue for awhile. the problem is, i don’t know when it’s going to end. but my guess is, it’s going to end very badly, and it’s going to end very badly because, again, when you get the biggest price in the world, interest rates, being manipulated you get a misallocation of resources and this is going to end in one of two ways. with a malinvestment bust which we got in ’07-’08. we didn’t get inflation. we got a malinvestment bust because of the bubble that was created in housing. or it could end with just monetizing the debt and off we go in inflation. so that’s a very binary outcome. they’re both bad. they’re both off in the future. i don’t know when. the one thing i would say, if you’re going to play, a i’m a professional investor without clients, and i am playing in the game, for god’s sake play in liquid instruments. i think a lot of people knew by early mid’08 that there was a problem but the reason they were hung, because they were instruments they couldn’t get out of. there’s plenty of wonderful public securities out there, don’t ask me what they are. this man knows them a lot better than me. that’s where you should be playing. playing in stuff that if you changer mind, and if the signs come that this game is coming to an end, you can get out. so i don’t know the answer to i tried not to. did malinvestment — so it would be a process, if it ends badly, that way. if it’s not an inflationary end — a malinvestment end would be, okay, we’re pumping all this money in, people are buying more and more credit. they’re buying bonds which yield 5%. i mean, how many elections are you going to have in zambia, how many possible government transfers in the next 20 years before those bonds mature and you get 5%. you’re telling me there’s no misallocation of resources going on? so, that’s — that’s my problem. is, when this thing ends, it could end very badly. however if it ends in a malinvestment way, the money pumping in, it has less and less efficacy, and the economy slows down or goes down to the point that those securities you

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