This is without a doubt the best thing I’ve read in several months. Einhorn absolutely nails what’s wrong with our current monetary policy. What’s amazing is not only how right-on he is, it’s how so many people can’t see it. Guess that’s why this guy is one of the best.
i’m confused, what is so awesome about an opinion the fed should normalize rates? i think its been discussed too many times already to even credit this thought as original (right maybe)…
Einhorn needs to take a basic macro econ class. The current economic situation is expected after a major credit bubble and the Fed’s response is pretty much the only response they can do.
Some cursory understanding of economic history would also serve him well.
Pretty ballsy for him to go bashing people that definitely know a lot more about economics than he does. I get that he’s a rich hedge fund guy but really.
i have to agree with Palantir/Tikka here…i don’t have the balls to say Einhorn isn’t knowledgeable on economics
…i also feel the fed pretty much has his hands tied though normalizing rates slowly isn’t at all a bad idea (which i think was Einhorn’s point)…
They say that you give someone a hammer and they view everything as a nail. Bernanke is smart enough to know that not everything is a nail, but he’s only been given a hammer, and no one else is able to do anything.
So although, yes, it’s not optimal what Bernanke is doing, he seems to be acting the only way that seems logical for him to do as a conscientious public servant… trying his best to use his hammer as a screwdriver, even though he knows its very inefficient to do that. But he doesn’t really have a choice, simply because while the ship is sinking, the guys with the screwdrivers are too busy having a debate about who is going to take credit for turning the screw.
Why is there a picture in my post? Can we post pictures? If so I’ll meme this place to high hell. This would be a perfect place for the GoT meme: “Brace yourself…the Keynesians are coming.”
Anyway, Einhorn and I will hold our gold and continue to watch the monetary policy feedback loop repeat itself in perpetuity.
I hope you mean physical gold and not paper…
I like Einhorn’s squeaky voice.
Actually I mean physcial silver. I get lazy and just say gold.
is Einhorn really all that good? i seen him on Charlie Rose…didn’t move me…
hes the youngest-looking 44 year-old ive ever seen, thats for sure.
He’s a wild character. Pretty much the last guy a CEO/CFO wants on their quarter conference call. He has a personality chip missing. One of the best at shorting…nailed the housing bubble, Green Mountain, etc…Look him up. He’s entertaining to read about.
Really good poker player too.
every investor type has a certain characteristic about them…are shorters haters?
While I agree with Pal/Tikka, I’ve gotta say I also agree with Einhorn. The traditional, keynesian expansionary policy, after four years, is clearly not working and it’s time to think outside the box. Of course, beyond that I’m only a L1 candidate, so I’ll just let the big whigs handle those details…
This monetary expansion is NOT Keynsian, it has NOTHING to do with Keynesianism.
Keynes advocated an active monetary and fiscal policy to stabilize the economy. He’s more heavy-handed on the fiscal side of things, particularly to combat recessions, but he did advocate expanding the supply of money to facilitate economic activity.
If Milton Friedman were alive he would have approved what FED had done. If the Fed didn’t save those big banks, US most likely would experience bank crisis which could kill lots of companies. If the Fed didn’t buy the treasury bonds, US would end up like Greece.
yupe…agreed…letting the banks fail was one of the many causes of the depression apparently…
The Fed raised rates during the Depression.