More and more people are criticizing the Fed’s monetary policy in the United States. Billionaire Stanley Freeman Druckenmiller believes that the measures adopted by the institution since 2021 are ineffective and will undoubtedly plunge the economy into recession. This will lead to public disinterest in the Central Bank, resulting in a crypto renaissance.
Faced with the recession, cryptos will be considered as safe havens
According to Stanley Druckenmiller, the crypto industry could rebound if citizens start to distrust their central banks. This is essentially what emerges from an interview he gave to the television channel CNBC. He believes that the loss of confidence is increasingly inevitable given the state of the global economy. The Fed’s difficult fight against inflation and recession also justifies its position.
Druckenmiller notably criticized monetary policy “radical” of the Fed in 2021. Measures which, according to him, have helped give rise to the most dangerous asset bubble ever seen. While he is happy that the Fed is finally fighting inflation, he does not think it will be able to hold out until the end of 2023 without causing a recession. As such, he remains skeptical as to whether the Fed will follow through on its mission to reduce inflation without backtracking.
“I was just incredibly frustrated with what felt like a Fed that was taking incredible risks (…) a crash in the economy usually follows these kinds of bubbles. However, the Fed ignored the situation because addressing it was not part of its mandate. »
The billionaire indicates that such a policy can only stimulate the loss of public confidence in central banks. In a recession, he explains, people will put their holdings into cryptos, which will inflate their values and spark a digital asset renaissance.
For the hedge fund manager, the Fed has conducted an ineffective economic policy since 2021. He remains convinced that this will certainly lead to a recession. According to his scenario, the situation will lead to an erosion of public confidence in the Central Bank. In terms, he sees people viewing bitcoin and cryptos as inflation-hedging assets, like gold.
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