The Blubber

Ray Dalio has said that America is facing a debt crisis as there may not be enough buyers for the influx of government debt on the market, per Fortune.

Billionaire hedge fund manager Stanley Druckenmiller has criticized Janet Yellen, labeling her actions as the "biggest blunder" in the history of the U.S. Treasury. Druckenmiller, known for his extensive career in finance with a net worth exceeding $6 billion, expressed his disapproval of the Treasury Secretary during a public discussion at the recent Robin Hood Investors Conference. His primary contention was that Yellen missed an opportunity to capitalize on the era of exceptionally low interest rates.

Druckenmiller noted that during the period of nearly zero interest rates, many Americans took advantage of the situation to refinance their mortgages, and corporations extended their debt. However, the U.S. Treasury failed to do so. He argued, "Unfortunately, we had one entity that did not: the U.S. Treasury."

In response to the COVID-19 pandemic in 2020, central banks worldwide reduced interest rates due to economic disruptions caused by lockdowns and health concerns. The U.S. Federal Reserve implemented a policy that drove rates to almost zero. In the wake of the pandemic, surging consumer demand, labor and production shortages, and global energy crises following Russia's invasion of Ukraine, inflation soared to its highest levels in four decades. Consequently, the Fed adopted a more hawkish stance over the past two years to combat rising prices, resulting in a series of interest rate hikes, pushing rates to a 22-year high.

Druckenmiller, who served as the chief investment officer at George Soros's wealth management firm for over a decade before establishing Duquesne Capital Management in the 1980s, argued that Yellen should have issued more long-term Treasury bonds when borrowing costs were lower. He contended, "Janet Yellen, I guess because of political myopia or for some other reason, was issuing 2-year bonds at 15 basis points when she could have issued 10-year bonds at 70 basis points or 30-year bonds at 180 basis points." He concluded that her decisions amounted to the "biggest blunder in the history of the Treasury" and questioned why she had not been held accountable for her actions, asserting that she had no right to remain in her position.