For Stan Druckenmiller This Is “The Endgame” – His Full ‘Apocalyptic’ Presentation

• For Stan Druckenmiller This Is “The Endgame” – His Full ‘Apocalyptic’ Presentation
  by Tyler Durden, www.zerohedge.com 
  Several days ago, hedge fund legend Stan Druckenmiller spoke at the Sohn Conference, delivering what may have been his most bearish fire and brimstone sermon yet, and in fact according to some buysiders who were present, its somber mood and lack of faux optimism was downright apocalyptic. And how can it not be when Druckenmiller said that while the Fed and policymakers have no endgame, markets do – hinting that one is rapidly approaching – and suggested that everyone should liquidate their equity holdings and buy a certain 5000 year old shiny asset, which as we reported earlier this week, is Druckenmiller’s “largest currency allocation.” 
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  And just so everyone can appreciate what is keeping up at night one of the most illustrious investing minds of any generation (with a 30% average return from 1986 through 2010) below we repost his entire presentation delivered at the May 4 Sohn Conference, titled appropriately enough…
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  The Endgame
  When I started Duquesne in February of 1981, the risk free rate of return, 5 year treasuries, was 15%. Real rates were close to 5%. We were setting up for one of the greatest bull markets in financial history as assets were priced incredibly cheaply to compete with risk free rates and Volcker’s brutal monetary squeeze forced much needed restructuring at the macro and micro level.
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  By most objective measures, we are deep into the longest period ever of excessively easy monetary policies.
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  Simply put, this is the biggest and longest dovish deviation from historical norms I have seen in my career. The Fed has borrowed more from future consumption than ever before.
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  … most of the debt today has been used for financial engineering, not productive investments.
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  I have argued that myopic policy makers have no end game, they stumble from one short term fiscal or monetary stimulus to the next, despite overwhelming evidence that they only produce an ephemeral sugar high and grow unproductive debt that impedes long term growth.
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  The lack of progress and volatility in global equity markets the past year, which often precedes a major trend change, suggests that their risk/reward is negative without substantially lower prices and/or structural reform. Don’t hold your breath for the latter.While policymakers have no end game, markets do.
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  On a final note, what was the one asset you did not want to own when I started Duquesne in 1981? Hint…it has traded for 5000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates. Some regard it as a metal, we regard it as a currency and it remains our largest currency allocation.
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