Stanley Druckenmiller. AP Images Stanley Druckenmiller, head of Duquesne Capital, thinks that the macroeconomy is looking disastrous and there are two sources for the coming problems.

Druckenmiller thinks that leverage is far too high, saying that central banks and China have allowed for these excesses to continue and it's setting us up for danger.

The obsession with short-term gains is overwhelming the need for long-term reform at the Federal Reserve, he said.

"It's this kind of myopia that causes reckless behavior at the government and corporate level," said Druckenmiller.

He highlighted that net cash flow has gone negative while net debt is still climbing at an unprecedented rate. He also said that instead of investing in growth, companies are adding the debt for financial engineering like buybacks and M&A.

The corporate sector is stuck in a "vicious cycle" of chasing earnings and adding debt, he said.

China was the second source of worry. Druckenmiller argued that the Chinese government has been fueling home building and growth through debt, and that will come back to bite it.

Druckenmiller said that he sees the global risks tilted toward the downside, and has shifted his outlook on the market from bullish three years ago to bearish now.

"The bull market is exhausting itself," he said.

He continued that if the market is a picture of the future of business, then why would there be a premium on companies when they have borrowed all of their growth from the future? He advocated that investors switch their portfolio to gold.

Druckenmiller is a long-time hedge fund investor, founding Duquesne Capital in 1981, but he then shifted the firm to a family office in 2010.

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