David Einhorn, an incredibly successful hedge fund manager has written an article lambasting Bernanke for the zero interest rates and the destructive impact it is having on savers and the economy. He also has created a fictional couple who have been hurt very badly by the Fed's shortsighted and obtuse policies. Here are some excerpts:
"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.
My point is that you can have too much of a good thing and overdoses are destructive. 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"
"When interest rates are low, everything changes. Homer and Marge are getting only a little interest on their savings, and are struggling to live off Homer's pension. They need to rethink their finances."
"What happens if interest rates go to zero and stay there?" Marge asked the advisor.
"You mean indefinitely? If you weren't willing to start taking investment risk, you'd need 50% more in savings, or $300,000. But why would you ask such a silly question?" asked the advisor.
To which Marge replied, "Well, we were thinking about moving to Japan..."
"Homer and Marge aren't the only ones doing this sort of math. Every single day for the next 19 years, more than 10,000 Baby Boomers will turn 65. Those who started saving for retirement 15 years ago are suddenly finding themselves with insufficient savings to do so." David Einhorn: The Fed's Jelly Donut Policy