Druckenmiller describes Britain as having stronger fiscal position than US with 2% deficit-to-GDP versus 4.5%.
“If you look at it, what if I were to tell you there was a Republican president but a better version, and you had two thirds Republican majorities, in both houses of congress.”
Druckenmiller says the only durable way to lower long-term yields is to address the primary deficit.
“Then do the only thing that durably lowers long-term yields: address the primary deficit.”
Druckenmiller states that a 30-year Treasury yield of 5.5 percent is not a crisis but simply a bill for fiscal choices.
“If the 30-year must trade at 5.5% to clear, that isn't a crisis. It is an invoice,”
Druckenmiller characterizes artificial yield suppression as a subsidy to government procrastination on fiscal reform.
“Every basis point of artificial yield suppression is a subsidy to procrastination,”
Druckenmiller calls the long-term Treasury yield the most important price globally and America's only remaining fiscal disciplinarian.
“The long-term Treasury yield is the most important price in the world. It is also the only fiscal disciplinarian the U.S. has left. ”