Monday, 24 October 2016
Last updated 4 min ago
Mar 1 2013 | 11:33am ET
Stanley Druckenmiller has some harsh words for his fellow retirees: Stop stealing from your grandchildren.
The Duquesne Capital Management founder, who stopped managing outside money in 2010, has cast aside his reputation for media shyness to launch a campaign for entitlement reform. And, he warns, if he's not listened to, the U.S. will see a financial crisis that will put the last one in the shade.
Speaking on the day before $1.3 trillion in automatic spending cuts took effect, Druckenmiller, 59, said that the sequester is nothing compared to the ballooning costs of Social Security, Medicare and Medicaid.
"While everyone is focusing on the here and now, there's a much, much bigger storm that's about to hit," Druckenmiller told Bloomberg Television. "I am not against seniors. What I am against is current seniors stealing from future seniors."
Druckenmiller said that the growing number of retirees and the shrinking workforce were threatening to bankrupt the country, and urged young people to take action.
"Look at our young people who are obsessed with the environment," Druckenmiller said. "They are looking at the consequences of our actions 50 to 60 years from today."
"With the proper education and with proper voices out there, we could have 40 million kids marching down to Washington."
Druckenmiller acknowledges it won't be an easy fight.
"The seniors have a very, very powerful lobby," he said. "They keep getting more and more transfer payments."
Druckenmiller said he was compelled to abandon his usual taste for quiet in part because he felt he didn't do enough to warn about the financial crisis, which he said he predicted as early as 2005. "I had my 30 charts with colors and pictures and laid out for them why I though it was going to be a huge, huge problem from the U.S. economy and the U.S. financial system," referring to a speech he gave at the Ira W. Sohn Investment Research Conference on "all those silly instruments."
And he threw cold water on the current market rally, calling it unsustainable.
"The chances of this being a new bull market like 1982 aren't high because we're not attacking the crux of the problem, which is too much leverage and too much debt," Druckenmiller said. "I don't know the timing of when the markets will respond to this, but it will happen."