Stanley Druckenmiller on the Fed's Asset Price Subsidy and QE's Negative Wealth Effect (CNBC Video)

Stanley Druckenmiller, founder of the hedge fund Duquesne Capital, was on CNBC last Thursday speaking the truth. Watch the segment below. If you can't watch it, here are important points he made during the interview via the transcript.

Everyone focuses on the Fed's balance sheet, $3 trillion and the problems that creates. Don't forget, there's another balance sheet, and that's the balance sheet of us in the market that sold them the bonds and were forced into the risk assets they're so desperate to have us in. We have been forced into prices of securities at subsidized prices and when those subsidies are removed, whenever that is going to be at sometime in the future, those prices will adjust as shown in June and they will adjust immediately. And they will do it on no volume....

I will bet from beginning to the exit that the wealth effect of QE will have been negative not positive.

I think when I was on your show in March, I said we were on the seventh inning in a full-year bull market. I thought we'd be about done right now, we're going into extra innings. The punch bowl was running out, it was just about dry and two waiters came in and they're carrying this new punch in. We're going to really party now.


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