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Druckenmiller: Trump's approach to trade is 'like a little kid that found this water gun'

Hedge fund legend Stan Druckemiller speaks with Kiril Sokoloff in a 90-minute interview on RealVision.

Hedge fund legend Stanley Druckenmiller, who now runs family-office Duquesne Capital, argues that President Donald Trump became destructive “once he figured out how powerful a weapon the U.S. banking system was and how powerful sanctions are.”

In a 90-minute interview with Kiril Sokoloff on Real Vision Television, Druckenmiller acknowledged that “this weapon” should be used only “once in a while.”

“But when you start just shooting it all over the place — and you’re now shooting it at Canada, at Europe, here or there — that’s a lot different than shooting at Iran or Russia,” he said, “He’s like a little kid that found this water gun, and he’s just running around going all over the place with it.”

According to Druckenmiller, the “biggest danger” is that global trust in America is eroded.

“I don’t think it can be lost in four years. I really don’t,” he said. “But if Trump is re-elected — or maybe even worse, if another populist on the very hard left is re-elected — and they use the weapon the same way, I think by [2024] — which by the way, is exactly when the entitlement thing will start to get crazy — this thing could be very bad.”

But Druckenmiller hasn’t yet surrendered to the worst case scenario.

“Let’s see who the Democrats put up,” he said. “Let’s see if Trump’s in office. But I don’t think the world will give up on us in four years. I’m open minded to Trump having been a one-off and the trade system can survive this.”

Druckenmiller isn’t, however, overly optimistic.

“It’s not like that’s an 80% probability,” he added. “It’s probably somewhere between 40 and 55 that it works out. It’s sad.”

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter. Send tips to laroche@oath.com.