REUTERS/Brendan McDermid
- Stanley Druckenmiller blasted the Federal Reserve for boosting asset prices and the national debt.
- He warned the dollar could cease to be the global reserve currency within 15 years.
- The investor is more bullish on bitcoin than Ethereum's ether, and expects to sell his stocks.
- See more stories on Insider's business page.
Stanley Druckenmiller warned the Federal Reserve's stimulus efforts are inflating a massive asset bubble, and endangering the dollar's status as the world's reserve currency, in a CNBC interview this week.
The billionaire investor and boss of Duquesne Family Office also expects to cash out his stocks in the next few months, suggested a cryptocurrency-based ledger system could usurp the dollar on the global stage, and predicted bitcoin will have more staying power than the Ethereum network's ether token.
Here are Druckenmiller's 10 best quotes from the interview, lightly edited and condensed for clarity:
1. "A monkey could make money in this market." – commenting on how a wide range of assets have surged over the past year as the Federal Reserve has pumped liquidity into financial markets.
2. "I have no doubt that we are in a raging mania in all assets. I also have no doubt that I don't have a clue when that's gonna end. I knew we were in a raging mania in '99, but it kept going on, and if you had shorted the tech stocks in mid '99, you were out of business by the end of the year."
3. "I can't find any period in history where monetary and fiscal policy were this out of step with the economic circumstances. We're still acting like we're in a black hole, when in fact the economy's accelerating."
4. "I will be surprised if we're not out of the stock market by the end of the year, just because the bubbles can't last that long. I really have an open mind and right now, treacherously, we're still playing the game to some extent."
5. "I'm worried for the first time that within 15 years we lose reserve currency status and all the unbelievable benefits that accrued from it." - warning that aggressive monetary and fiscal policy will make the national debt balloon, damaging the dollar's prospects.
6. "I really don't understand why 1.6% inflation with a mandate of price stability is a national tragedy. If the Fed wanna do all this and risk our reserve currency status, risk an asset bubble blowing up, so be it. But I think we oughta at least have a conversation about it."
7. "The elephant in the room is inflation. It may become so obvious that the Fed has to move, and the longer they wait to move, the bigger the bubble will be and the bigger the reaction."
8. "Five or six years ago, I said that crypto was a solution in search of a problem. That's why I didn't play the first wave of crypto - we already have the dollar, so what do we need crypto for? Well, the problem has clearly been identified, it's Jerome Powell and the rest of the world's central bankers."
9. "The most likely replacement for the dollar would be some kind of crypto-derived ledger system invented by some kids from MIT or Stanford or some other engineering school that doesn't exist yet."
10. "It's going to be very hard to unseat bitcoin as a store of value, because it's got a 14-year brand, and there's a finite supply. Ethereum has the lead in terms of smart contracts, in terms of commerce. But Facebook was not the first social network, it was number 11, and Yahoo may have invented the search engine, but we all know what happened with Google versus Yahoo. It's just not probable in my mind that Ethereum is gonna be the ultimate winner."