Druckenmiller says core PCE was 1.5% when Greenspan raised rates from 4.75%, now it's 1.7% at 1.5% Fed funds.
“I look back and the core PCE was one and a half in '98 and '99 when Greenspan started raising rates again from 475 is currently one seven and he's got them at 1.5.”
Druckenmiller notes the US is running a trillion dollar deficit at full employment alongside negative real rates globally.
“We're running a trillion dollar deficit at full employment. Apparently, we're gonna have some sort of green stimulus in Europe, and we have negative real rates everywhere and negative absolute rates a lot of places.”
Druckenmiller blames the financial crisis on easy money bubbles and questions current low interest rate policy.
“I will go to my grave believing that that financial crisis happened because of bubbles created by easy money. And I just don't understand why we need interest rates where they are now.”
Druckenmiller notes $18 trillion in negative-yielding debt existed a year ago despite imminent 8% inflation.
“Even as late as, I think a year ago, was 18,000,000,000,000 of debt that was still negative yielding when the world was about to experience 8% inflation. It's pretty extraordinary.”