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Former HF Manager Predicts Financial Meltdown

Mar 03, 2013
Jing Chen

Hedge fund manager Stan Druckenmiller believes that the elderly population in the U.S. will eventually lead the country to a financial meltdown worse than that of 2008.

Druckenmiller, the former chairman of the now-defunct firm Duquesne Capital, told Bloomberg that the rising costs of Social Security and Medicare will bankrupt the nation's youth and pose a greater danger to the U.S. than the country's current $116 trillion debt. 

However, Druckenmiller added that he is not against the senior population, just "current seniors stealing from future seniors."

Usually press shy, Druckenmiller said that he is speaking about the issue now because he felt he did not do enough prior to the 2008 global financial crisis. 

Separately, the article also said that the former hedge fund manager is also siding with a new bill signed by President Barack Obama in January that would treat carried interest -- the amount hedge fund and private equity managers make from a firm's performance -- as ordinary income. That means rather than taxing it at the current 15% capital gains rate, the tax rate would go up as high as 35%.

"Current income is current income," Druckenmiller said. "That thing should have gone away years ago."

Druckenmiller shut down Duquesne Capital in 2010 after he felt like he could not deliver high returns to investors.

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