Chapter
The Risk of Stagflation and the US Debt
27:47 - 34:17 (06:29)
Stanley Druckenmiller warns that if the US 10-year Treasury yields rise to 4.9%, government spending would be mostly paying back interest expense, leading to a risk of stagflation in the form of a supply chain shortage and a 5.1% interest rate. This would result in the entire federal budget being used for debt service, limiting flexibility for future interest rate increases.
Clips
Billionaire investor Stanley Druckenmiller warns that if the US does not take action to control spending, and interest rates on public debt continue to rise, the country may face stagflation.
27:47 - 34:17 (06:29)
Summary
Billionaire investor Stanley Druckenmiller warns that if the US does not take action to control spending, and interest rates on public debt continue to rise, the country may face stagflation. This means that the US government may soon face the possibility of allocating around 30% of its total GDP each year just to pay back interest on public debt, a risk for the dollar's stability.