DRUCKENMILLER WARNS: 'The chickens will come home to roost'

Stanley Druckenmiller doesn't think the Federal Reserve's experiment of keeping interest rates near 0% to spur economic growth will end well.

Speaking at The New York Times' DealBook Conference on Tuesday,Druckenmiller said "all you do" when keeping interest rates at 0% for this long is "pulling demand forward today." "This is not some permanent boost you get — you're borrowing from the future," he said.

Druckenmiller also said he thought there had been "a misallocation of resources" because the zero-interest-rate policy had gone on so long and, he said, "so unnecessarily."

"The chickens will come home to roost," he added.

The basic idea supporting rates at 0% is that the economy isn't as strong as it needs to be (or should be), and only by keeping interest rates super low will the Fed be able to give the economy the space and time it needs to repair itself.

But in Druckenmiller's view, this policy has simply created bad behavior. And worse, he thinks, it has mortgaged the economy's future potential.

More