David Einhorn mocked monetary policy in a piece entitled, The Fed’s Jelly Donut policy, almost a decade ago.
“A Jelly Donut is a yummy mid-afternoon energy boost. Two Jelly Donuts are an indulgent breakfast. Three Jelly Donuts may induce a tummy ache. Six Jelly Donuts — that’s an eating disorder. Twelve Jelly Donuts is fraternity pledge hazing,” wrote David Einhorn.
“My point is that you can have too much of a good thing and overdoses are destructive,” he added.


“My point is that you can have too much of a good thing and overdoses are destructive”
DAVID EINHORN
David Einhorn mocked monetary policy using his analogy of jelly donuts where the eyes are greedier than the belly and where the overindulgence is exacerbated by Fed policy
Central bank liquidity today is now the overriding driver of the business and economic cycle. It is Fed policy that decides the winner and losers, not the free market price mechanism. The market is captive, power politics influence investments in a plutocracy.
The Fed created more than 10 trillion dollars over the last decade in the wake of the 2008 financial crisis. So why is the domestic railway system so underinvested? US GDP, 24 trillion US dollars in 2022, and Spain’s, GDP 1.9 trillion US dollars in the same year. Spain, an economy 10% the size of the US, has a more advanced railway system and affordable national health care.
“Chairman Bernanke is presently force-feeding us what seems like the 36th Jelly Donut of easy money and wondering why it isn’t giving us energy or making us feel better. Instead of a robust recovery, the economy continues to be sluggish. Last year, when asked why his measures weren’t working, he suggested it was “bad luck,” he wrote.
David Einhorn mocked monetary policy, but maybe the Fed, a banking cartel, is having the last laugh
The decade of the Fed’s easy money policy made the speculative class of billionaires even richer, widened the wealth gap, and impoverished everyone else.
Trickle-up wealth monetary policy is doing a splendid job of consolidating wealth to the top of the human food chain.

“Chairman Bernanke is presently force-feeding us what seems like the 36th Jelly Donut of easy money and wondering why it isn’t giving us energy or making us feel better”
DAVID EINHORN
The richest 1% bag nearly twice as much wealth as everyone else.
If you think this is a coincidence and not financial engineering, we have a mortgage-backed security to sell you.
David Einhorn mocked monetary policy but look behind the curtains, and you will see a policy aiding and abetting consolidation of wealth and power
Fed rate hikes in 2022 pricked the bubble of everything and triggered at least five bank runs. The big banks took over the smaller banks in distress. It is the consolidation of banking with a handful of banks providing financial services.
“I don’t think luck has anything to do with it. The blame lies in his misunderstanding of human nature,” he wrote.
But my fifty cents worth is that the Fed, which owns the think tank and employs an army of Ph.D. economists, is not stupid. They are playing stupid.
“In the 2012 economy, a zero rate policy not only adds no benefit, but it’s also harmful” – David Einhorn
David Einhorn noted an example of how households and businesses respond rationally to monetary policy.
High-interest rates scenario savers, fixed income investors are better off. Alternatively, households are burdened with debt default, and businesses decide to hold off on expansion.
When interest rates are low, the table tilts. Savers and pensioners living on fixed incomes are struggling; households burdened with high debt can refinance with cheaper loans and service credit card debts and mortgage payments, and businesses raise low-cost finance to invest.
“In the 2012 economy, a zero rate policy not only adds no benefit, but it’s also harmful,” he wrote.
Low-interest rates push savers into higher-risk assets, and he believes stocks could outperform bonds.