"We Have An Entitlement Problem" And One Day The Fed's Hamster Wheel Will Stop

Two and a half years ago, George Soros' former partner Stanley Druckenmiller closed shop when he shut down his iconic Duquesne Management, after generating 30% average annual returns since 1986. Some time later he raised many red flags by being one of the first "establishment" types to expose the Fed's take over of the market when he said in a rare May 2011 [12]interview that "It's not a free market. It's not a clean market.... The market isn't saying anything about the future. It's saying there's a phony buyer of $19 billion of Treasurys a week." This was in the context of the constantly declining interest rates on an ever exploding US debt load. And while back then total debt was a "manageable" $14.3 trillion, as of today it is some $2.3 trillion higher moments ago printing at a fresh record high of $16.6 trillion [13], not surprisingly the phony buyer is still here only now he is buying not $19 billion by over $20 billion in total debt each week. But just like it was the relentless rise in the US debt that forced him out of his privacy in the public scene back then, so it was also the US debt that was also the topic of his rare CNBC appearance today (where he fiercely poked at all those other TV chatterbox pundits when he said "money managers should manage money and not go on shows like this") in the aftermath of his recent WSJ Op-Ed. [14]There, he once again said what everyone knows but is scared to admit: "we have an entitlement problem."

Druckenmiller's definition of the problem:

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