Druckenmiller: "I Sold All My Gold On The Night Of The Election"

Tyler Durden's picture

Just six months ago, Stanley Druckenmiller saw nothing but pain for the economy: in a presentation to the Sohn Conference in early May, the legendary Duquesne manager delivered 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. 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 previously, is Druckenmiller's "largest currency allocation."

The caption in the following chart from his presentation summarized it best:

 

 

What a difference half a year makes...  and one Donald Trump presidency

Speaking to CNBC this morning on the topic of the post-Trump election economy, Stanley Druckenmiller appears to have flipped his entire worldview, and said that he is now "quite, quite optimistic" on the U.S. economy, following the election of President-elect Donald Trump. "It's as hopeful as I've been in a long time."

But even more notable was his statement that he is no longer a gold bug: "I sold all my gold on the night of the election." Why? Because as he added “all the reasons I owned it for the last couple of years seem to be ending", first and foremost his expectations that inflation is now set to spike, forcing money out of safe assets - like gold and Treasuries - and into the US Dollar. 

As a result of the Trump presidency, Druckenmiller said he now has a “large bet on economic growth. I’m short bonds, Bunds, Italian bonds, U.S. bonds.” The trade reflect his expectation of higher deficits, stronger growth. In other words, another surge in debt.

He added that he is “hopeful” on the Trump administration and political climate. “I would not be surprised if we’re looking at the absolute peak of divisiveness.” Druckenmiller said that he was hoping economic policy is deferred to Pence and Ryan. “Ryan’s got a plan called ‘A Better Way.’ It’s a specific plan on deregulation, on how to replace - not just get rid of Obamacare. It’s got tax reform in there."

Druckenmiller added that he believes the Trans-Pacific Partnership free trade deal, opposed by Trump, is good for business, however he conceded that Trump's anti-globalist agenda will likely prevent it, and is will to accept that compromise.

Curiously, despite his renewed hope in the world as a result of the Trump presidency, Druckenmiller had supported John Kasich for the Republican nomination, calling the Ohio governor the best establishment alternative to Trump.

As we said yesterday, overall we believe that Druck is right, and the upcoming fresh burst of debt, and higher rates, is what will provide the impetus for fresh gains in stocks and the economy, even as it leads to massive losses for global bond investors. The problem, however, is just how higher rates will impact overall debt service: as we also reported several weeks ago, it is another legendary investors, Bridgewater's Ray Dalio, who warned that a jump in yields at a time of record global debt will not only lead to massive losses across all asset classes, not just bonds, but also lead to another economic contraction.

We look forward to finding out which of the two investing titans is right.

Druckenmiller's full interview is below.

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USisCorrupt's picture

Being on CNBC speaks for itself.

Clueless...

J S Bach's picture

Makes sense to me.  Now that there are tens of trillions more dollars floating around out there, there's no reason why each one of them shouldn't be increasingly more valuable.  I think I'll do the same.  Thanks for the free advice, Stan!!!

back to basics's picture

I stopped being amazed at the stupidity of these people. Seriously, how did these fucks get this filthy rich with misguided opinions that they can change like a dirty shirt and then go on television bragging about it?

Bay of Pigs's picture

His remarks on holding some gold make no fucking sense at all.

Anther guy going Full Retard.

tmosley's picture

Don't get attached to one asset. When the world changes, you need to be prepared to change with it.

Now is not the time to divest yourself of PMs. Either Trump triggers the collapse voluntarily, and we get our YUUUGE recession now (and have it be shorter thanks to actually allowing the market to work), or he doesn't and shit just keeps building up, and it likely all comes tumbling down before the end of his first term anyways.

No, the dollar will fall, one way or another. Be ready to buy productive assets at firesale prices when everyone is scrambling for liquidity as everyone dumps their treasuries and dollars.

Short Squeeze's picture

I would think part of MAGA would be a strong dollar. See my comment below.

Pinto Currency's picture

$63 trillion of total debt, an economy distorted by decades of loose money, and rising goods inflation. Recipe for a crisis and can't be addressed with tax policy or gov deficit spending. Global currency crises coming as world is sunk with debt.

Consider N. American energy producers, gold, silver, and ag sector.

Fizzy Head's picture

in a volatile time and volatile market, it IS ok to get attached to smart assets. PM's, land, tools.. these will always have value, i mean, there'll be value on the paper side too. We all gotta wipe.

Check out the 30 day volatility of bitcoin vs. PM's, its safe to say the Gold isn't going to lose anyones hard earned cash anytime soon.

http://www.stubbornmule.net/2013/05/bitcoin-what-is-it-good-for/

stay alert and keep stackin boys.

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) Fizzy Head Nov 10, 2016 11:33 AM

Can't wait for the collapse when d00sh-bags like Druckenmiller find out that all of their "assets" were really just blips on a screen somewhere.

Al Bendova's picture

Pretty sure his "gold" was just a blip on a screen.  He doesn't know what gold is or why he should own it.

CJgipper's picture

How'd they get rich?  Momentum trading and insider information.

tarsubil's picture

You have to sell your gold for dollars now so you can spend the dollars before they lose value.

Yeah, yeah, that's the ticket.

halcyon's picture

If you don't understand relative asset price value (incl. carry cost), perhaps you should stick to inside mattress investing.

shovelhead's picture

Lol.

I should cancel all my insurance and buy Apple.

Happy days are here again...

Perimetr's picture

More clear thinking from the brainwashed.

Stanley, tell me, have you noticed how many digital fiat dollars the US has been creating/printing lately?  

What a giant store of endless wealth!  All we have to do is add zeros to the balance of our national bank account. Magic! 

Also called "monetizing the debt". Each additional trillion dollars created with no basis in reality (unsterilized) only DECREASES the value of the dollar.

Especially in the eyes of the international community, especially in the eyes of those who have been holding them.

Which is exactly why China et al are DUMPING them.  

Soon China will not be accepting dollars/bonds in payment for its industrial goods.

I know it is hard to understand, who would not want our pretty toilet paper currency that we print and print and print and print . . . .

And the first post was the best, Stanley sold PAPER GOLD, which they also print and print and print and print and print . . . . 

Kaiser Sousa's picture

some moron here commented that a pck of cigarettes will soon be more valuable than 10 Gold coins...

i'll be adressing his lunacy, not him directly, tommorow...

u cant teach stupid...

Whalley World's picture

Exactly, inflation bad for gold? That's news to me.

Going Loco's picture

'inflation bad for gold?' - it depends what sort of inflation you are experiencing. If you define inflation as increases in the supply of money and debt (and you accept that rising prices are merely a symptom) then Mish showed some years ago that gold has a very poor record as a hedge. That's not a matter of opinion, it's demonstrably a fact. Gold nowadays usually does best in deflation when it is a good hedge against failure of the financial system which is hooked on growth and might fail if deflation become endemic. However in a hyperinflation, defined as a loss of trust in the currency, gold (and possibly silver) are worth having.

Justin Case's picture

Inflation is a currency event. The value of the currency falls and therefore requires moar currency to pay for the same goods. Prices don't rise, currency value falls. When it continues to fall people spend it faster and faster until hyperinflation ensues. Goods disappear and the tonnage of currency exceeds the amount of goods available. It then collapses and a barter system, gold, silver or some acceptable foreign currency are substituted for the worthless local currency.

Kirk2NCC1701's picture

Stan is using a headfake, or he's having a George Costanza "Opposite Day".

https://www.youtube.com/watch?v=1Y_6fZGSOQI

StateofFraud's picture

Right J S Bach,

"first and foremost his expectations that inflation is now set to spike, forcing money out of safe assets - like gold and Treasuries - and into the US Dollar"

What idiocy is this?

LMAO's picture

"Drunkenmiller"....and therein lies the rub

Hal n back's picture

Its a trade and like others talking his book.

If Trump does what he said, he will deficit spend maybe an extra trillion a year over now. Cuttung taxes is another few hundred billion a year.

It is a gamble, and i am pro Trump.

Citxmech's picture

More like he's selling CRIMEX hyper-levered paper bullshit that he can't take delivery on - AND he can't find enough physical at a decent price - SO IT'S TIME TO SELL, FOLKS - so he and his f'n croneys can buy it.

What a transparent douche nozzle. 

Kaiser Sousa's picture

im dying to know what asshole junked ya 4 that statment of fact...

shamus001's picture
"I Sold All of My Gold On the Night of the Election"

 

No doubt to pay off the bookies due to a bad bet.

 

 

Oracle of Kypseli's picture

<<<<that inflation is now set to spike, forcing money out of safe assets - like gold and Treasuries - and into the US Dollar. >>>>

That statement does not make sense. Gold protects you from inflation.

Croesus's picture

@ Oracle: 

Thank you. 

The case for Gold is stronger now, than it ever was before, thanks to all of the uncertainty. 

Gold is Money. 

SomethingSomethingDarkSide's picture

Pretty sure I have this figured out:

There are 'Predatory Algos' whose primary purpose is to produce big swings in the opposite direction of heavily stacked positions.

Oil - exploded higher at times of peak shorting.

Markets - inconceivably bounce back at times of peak selling.

Gold - slammed down night after night, despite enormous inward fund flows.

VIX - beaten like a red-headed step child, almost to the point where it can be viewed as short fuel to be squeezed.

 

My suggestion: Short Term Investing is dead.  Put a fork in it.  NO ONE knows what these ass clowns in DC are going to do.  There is only the Long Term, and everything else will be a Max Pain Trading Dog and Pony show in order to retain political contol.  Dollar Cost Average everything, stay faithful to your percieved future values.

espirit's picture

Call it a 'vacuum market'.

Trained algos rebalance after running stops.

The only winners are those who forecast volitilty.

 

Drunkenmiller 'trying' to create volitility by convincing everybody else to sell. Hahaha.

Shift For Brains's picture

"My suggestion: Short Term Investing is dead.  Put a fork in it.  NO ONE knows what these ass clowns in DC are going to do.  There is only the Long Term, and everything else will be a Max Pain Trading Dog and Pony show in order to retain political control.  Dollar Cost Average everything, stay faithful to your perceived future values."

*************************

ZH should be headlining you instead of Stan the Glans. Stan is still playing the Old World Game. That game has been dying and was formally buried on Tuesday. What is happening world-wide is a sea change of global proportions. Take a look at millennial values (not the ones in the street, the normal ones). WHAT business is and HOW it is conducted is going to be changing dramatically. Fucking over everyone you can get away with will no longer be de rigeur. Stan is investing like it's 1990, oblivious to anything but what the charts in front of his beady little eyes tell him.

You have summed up the most intelligent approach. Get all objective info you can muster on where things are going LONG TERM and buy for that over time. Let the afflicted on Wall St. pump and dump to their heart's content. You will not only be safer with less volatility, you will be contributing to obliterating a system that has made its fortunes on all of our backs.

BTW I just emptied my home office shelves of ALL investing books and financial materials. I know what I am investing in (my skills and local productive assets first) and I don't need any more smoke from asshats like Stan. What's cool is I now have room for my Favorite Toys of Childhood Collection, out where I can see and enjoy them. More than I can say for listening to these schlemiels.

 

SomethingSomethingDarkSide's picture

What a compliment!  I should aim for less crass and more fact.  But crass is so fun!

Felt the exact same way reading CFA material, no wonder investment companies are failing left and right - they don't even know how the world turns anymore!  50+ years of continuous trends does not make for scientific fact, especially when those trends were prepared and administered by a governing elite seeking to end Social Mobility.

One day markets will be efficient again, until such time it is back to basics.

Junction usually lights me up like a Christmas Tree for my punk commentary, this might be the final push off the vulgarity ledge for me.  Thanks again!

Kaiser Sousa's picture

but..."it doesnt accrue interest" ive been told....

 

 

Kirk2NCC1701's picture

Hence the expression "Cold, hard cash"

Au_Ag_CuPbCu's picture

Agree, not sure I understand why inflation would cause people to sell gold and buy the dollar...

Bendromeda Strain's picture

I hope that the type of tax reform we get punks the rentier class good and hard.

fbazzrea's picture

That statement does not make sense.

it does if you're trying to drive the price of gold down so you and all your cronies can buy fizz at bargain prices before the big run-up of inflation. he booked his paper gold profits and is probably pivoting into real money.

and the poor sheeple listening to MSM for investment advice will get another shearing.

Rich Stoehner's picture

The smartest investors always sell gold before the price goes higher.

Toxicosis's picture

I strongly think this idiot's a liar.  He comes out on national TV and announces this, although we have no proof of such 'selling' nor

his physical ownership.  Why would he not be just another shill 'selling' people the opposite of what they should really do.  Anyhow I'm keepin'

mine, as the bond market says full steam of inflation and money printing ahead.

fbazzrea's picture

he's got to have someone on the other side of his trade

Carpe Tutti Bastardi's picture

"The smartest investors always sell gold before the price goes higher."

I don't know about the "smart" part !

ZH Snob's picture

this is why paper gold futures must end.  

real gold isn't something one sells on a whim.  we hold it for the long haul, especially at a point like this in world finances.

trump will accelerate the money printing, just like he said he would.

there will be a renewed sense of hope from this helicopter money...but a short while later...

HYPERINFLATION

 

NIRP Diggler's picture

Exactly.  If he sold all his gold in the wee hours of Wednesday morning, he never had any.