Worst is Yet to Come? US Billionaire Warns of Crisis Worse Than 2008
SputnikNews.com
06.05.2016
The current situation in the global economy is similar to the situation on the eve of the crisis of 2008, billionaire trader Stanley Druckenmiller said.
According to the businessman, the main risks stem from actions of the US Federal Reserve and the People’s Bank of China.
He criticized the Federal Reserve for its “myopic policy” of low interest rates which has led to growing bullish sentiments in the market.
“The bull market is exhausting itself,” he said at the Ira Sohn Investment Conference in New York.
The Fed’s easy monetary policy has resulted companies taking on massive debt loads which they then used to buy back shares, instead of increasing capital spending.
By keeping interest rates low, the Fed is ‘raising the odds of the economic tail risk they are trying to avoid, Druckenmiller pointed out. The same policy of the Chinese Central Bank is also harmful to the global economy.
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