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Druckenmiller: This could end 'very badly'

David A. Grogan | CNBC

Billionaire investor Stanley Druckenmiller has once again warned that the easy money policies of recent years could end poorly.

"I know it's so tempting to go ahead and make investments and it looks good for today," the retired founder of Duquense Capital Management said, "but when this thing ends, because we've had speculation, we've had money building up four to six years in terms of a risk pattern, I think it could end very badly." (Tweet this)

The investor's comments were made at an event in Palm Beach, Florida on Jan. 18, but the transcript was just circulated on Friday.

Druckenmiller cited warning signs like the high number of initial public offerings of companies that are unprofitable, and high levels of debt issued to companies, often with poor credit ratings and without many lending restrictions—so called covenants.

Read More Druckenmiller: Fed policy 'fraught with unappreciated risk'

Druckenmiller also said that comparing modern day economic policy to that of the Great Depression-era was totally inaccurate. He implied that the U.S. Federal Reserve would not cause to another recession by tightening the flow of money into the system.

Druckenmiller showed slides at the event displaying how net worth per household hadn't returned to pre-1929 levels in 1937, before rates began rising. He compared that to how wealth has risen today far beyond pre-crash levels in 2007.

"We're not even close to the kind of numbers we had in 1937," he said.

Some, recently including Ray Dalio of Bridgewater Associates, have said too fast of an interest rate increase by the Fed could push the country back into an economic recession, similar to what happened in 1937 when stimulus programs were likely cut back too early.

Read MoreRelax, the Fed isn't risking a 1937-style slump

'I don't know how we get out of this'

Despite the pessimism, Druckenmiller said he was not "net short" stocks, a term that would indicate his negative bets—or shorts—outweigh his positive ones, or longs.

"You have to be on alert to that ending badly. Is it for sure going to end badly? Not necessarily. I don't quite know how we get out of this, but it's possible," he said.

The remarks were made at an event that also featured Home Deport co-founder Ken Langone at the Lost Tree Club, a golf club in affluent North Palm Beach.

A spokesman for Druckenmiller declined to comment.

He is now chairman and CEO of the Duquesne Family Office. Druckenmiller, also a veteran of Soros Fund Management, closed his hedge fund in 2010, following one of the best long term investing track records in money management.