Billionaire hedge fund manager Stanley Druckenmiller pulled no punches during a fireside chat with legendary trader Paul Tudor Jones at a recent Robin Hood Foundation event, slamming Treasury Secretary Janet Yellen.

In his view, Yellen made the worst mistake in the history of the Treasury, by not issuing more long-dated government bonds before the Fed began hiking rates early last year. And that, Druck believes has helped pave the way for a debt disaster.

"When rates were practically zero, every Tom, Dick, Harry, and Mary in the United States refinanced their mortgage," Druckenmiller said.

"Unfortunately we had one entity that did not, and that was the US Treasury."