– Stanley Freeman Druckenmiller (Wikipedia):
Stanley Freeman Druckenmiller (born June 14, 1953) is an American hedge fund manager, he is the former Chairman and President of Duquesne Capital, which he founded in 1981. He closed the fund in August 2010 because he felt unable to deliver high returns to his clients. At the time of closing, Duquesne Capital had over $12 billion in assets.
From 1988 to 2000, he managed money for George Soros as the lead portfolio manager for Quantum Fund. He is reported to have made $260 million in 2008.
– Druckenmiller Blasts “The Biggest Redistribution Of Wealth From The Poor To The Rich Ever” (ZeroHedge, Sep 19, 2013):
Reflecting on exactly what was said yesterday, Duquesne’s Stanley Druckenmiller is initially perplexed as Bernanke explained ‘financial conditions’ – not interest rates – have prompted the decision to forestall any taper. His confusion is that financial conditions are actually slightly better than they were in June and “a stock market at an all-time high would suggest we don’t have a problem with financial conditions.” While he dismisses surveys, the big-money was betting that they were going to taper as is clear from the moves in gold, bonds, and stocks; and it appears the Fed “lost their nerve.” In fact, Druck continues, the Fed “blew it… they had a freebie,” they could have started the process to “get us off the dope.” This action, or inaction, he warns “is going to make it so much harder for the next Chairman to start the process.” In fact, he concludes, that from beginning to end – once markets adjust from these subsidized prices – that the wealth effect of QE will have been negative not positive.
His discussion focuses on the transparency mistakes, the cornering they have managed, and the concerns he has over QE in general…
QE1 he supported as a crisis-fighting tool at the time – but from QE2 onwards and 5 years and he “doesn’t think the academics at the Fed understand the unintended consequences of the exit.”
At around 13:45 he also provides a clear explanation of the ‘other side’ of the Fed’s expanding balance sheet – the average investor who is ‘forced’ to sell them the bonds and take on more risk… this has forced us to buy securities at subsidized prices and when they adjust, at whatever point in the future, they will adjust immediately and on no volume.
In fact, he concludes, that from beginning to end – once markets adjust – that the wealth effect of QE will have been negative not positive.
At 15:00, he explains how this is the biggest redistribution of wealth from the middle class and the poor to the rich ever – “who owns assets” he asks rhetorically…
Druckenmiller begins at 8:03…
“When a country embarks on deficit financing and inflationism (= Quantitative easing) you wipe out the middle class and wealth is transferred from the middle class and the poor to the rich.”
– Ron Paul
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
– Alan Greenspan
“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
– John Maynard Keynes
Quantitative easing = printing money = creating money out of thin air = increasing the money supply = inflation = hidden tax on monetary assets = theft!