David Einhorn "I Asked Bernanke Questions, And The Answers Were Frightening"

Tyler Durden's picture

Ben Bernanke may be gone from the helm of the world's most centrally planned economy, but his ample cluelessness remains. David Einhorn, president of Greenlight Capital, better known for comparing QE to jelly donuts and who recently confirmed what we have been saying for a long time that the second dotcom bubble is here, spoke with Bloomberg TV covering a wide range of topics, but what caught our attention was his synopsis of a private dinner he had with Chairsatan-emeritus Ben Bernanke, on March 26.

What he found, in his own words, is disturbing.

"I got to ask [Bernanke] all these questions that had been on my mind for a very long period of time, right? And then on the other side, it was like sort of frightening because the answers weren’t any better than I thought that they might be. I asked several things. He started out by explaining that he was 100 percent sure that there’s not going to be hyperinflation. And not that I think that there’s going to be hyperinflation, but it’s like how do you get to 100 percent certainty of anything?"

It goes without saying that only fools are 100% certain of anything, which in fact explains pretty much everything.

So is it too late to cross off the final "conspiracy theory" of the tinfoil hat list: that the entire world is led by clueless Keynesian economist fools, whose adherence to perpetatuing the broken and insolvent status quo means that the only outcome possible after this final, all-in (luckily) bubble finally bursts, is either systemic collapse or world war?  Or do we actually have to live through it before we are proven right once more?

That's ok, we are in no rush.

Curious for more? Here is the full transcript of the key part of the exchange between Bloomberg anchors Schatzker and Ruhle, and Einhorn.

RUHLE: ... you recently had dinner with Ben Bernanke. What went down? We didn’t get to be there.

EINHORN: Well, it was -- I watched him for years in front of Congress and speaking and watched him on TV and “60 Minutes” and --

RUHLE: And what was your opinion of him before you had dinner?

EINHORN: I was -- I’ve been critical. I’ve been critical of him for a very long time. And the dinner for me, in one way it was cathartic because I got to ask him all these questions that had been on my mind for a very long period of time, right? And then on the other side, it was like sort of frightening because the answers weren’t any better than I thought that they might be.

SCHATZKER: What did you ask him?

EINHORN: I asked several things. He started out by explaining that he was 100 percent sure that there’s not going to be hyperinflation. And not that I think that there’s going to be hyperinflation, but it’s like how do you get to 100 percent certainty of anything? Like why can’t you be 99 percent certain and like how do you manage that risk in the last 1 percent? And he says, well, hyperinflations generally occur after wars and that’s not here. And there’s no sign of inflation now and Japan’s done a lot more quantitative easing than we’ve done, and they don’t have it. So if there is a big inflation, the Fed will know what to do. That was kind of the answer.

RUHLE: What did you say?

EINHORN: That was it. Then it went to the next question. So then a few minutes later it came back and I got to ask him about the jelly donuts. And my thesis is that it’s like too much of a good thing. Like lowering rates and quantitative easing and these stimulative things, they help but with a diminishing return. And eventually you go too far and it’s like eating the 35th jelly donut. It just doesn’t help you. It actually slows you down and makes you feel bad. And my feeling has been that by having rates at zero for a very, very long time the harm that we’re doing to savers outweighs the benefits that might be seen elsewhere in the economy. So I got to ask him about this.

SCHATZKER: Okay, and what did he say?

EINHORN: Well first of all he says, you’re wrong. That was good. And then he said the reason is if you raise interest rates for savers, somebody has to pay that interest. So you don’t create any value in the economy because for every saver there has to be a borrower.

And what I came back to him was I said, but wait a minute. You said for a long time we haven’t had enough fiscal stimulus, and who’s on the other side of the low interest trade? It’s the government. And so if the government -- if we raise the rates, the government would have to pay more money to savers. You’d have the bigger deficits. You’d create the stimulus, the fiscal stimulus that you’ve been complaining that Congress wouldn’t give to you, right? And savers would benefit from the higher rates and because savings is spent at a very high rate in terms of interest -- interest income on savings is spent at a high percentage, you’d get a real flow through into the economy.

SCHATZKER: One of the questions you’ve raised about quantitative easing in one of your letters to investors was about inequality. Did you get any satisfaction from Ben Bernanke on the question of whether quantitative easing exacerbates inequality?

EINHORN: Yeah, that did come up and I don’t remember exactly what he said. So I don’t want to --

SCHATZKER: It wasn’t memorable.


SCHATZKER: How about this notion that Warren Buffett has propagated that the Fed has become with its $4 trillion balance sheet the greatest hedge fund in history?

EINHORN: Yeah. I’m not sure that’s meant as a compliment.

SCHATZKER: But did that issue come up?

EINHORN: Yeah. There were people who were asking, yes, and he says the Fed can manage their way out of it when the time comes.

SCHATZKER: But in a persuasive way? Did he convince anyone?

RUHLE: Or did he say Janet’s problem now, not mine? I’ll have another drink.

EINHORN: He was very supportive of Janet.

SCHATZKER: No doubt.

RUHLE: Are you?

EINHORN: I want to keep an open mind here. I saw her speak at the Economics Club a couple weeks ago and I was impressed by her speech. I thought -- she said, look, we have a base expectation, but things change. And when things change, we’re going to change our policy. I thought that was good. She’s -- I don’t look at one economic factor to drive things. I’m going to look at all of the factors. I thought that was good. I think the way she’s approaching problems at least conceptually is very good. I’d love to see if she has a better reason why rates should remain at zero at this stage in the economy, but you take these things and see where she goes. She’s just gotten started.

* * *

Yes. She "just" has. And yes, Bernanke's problems are now her problems.


Full Bloomberg TV interview below:

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alphamentalist's picture

when bernanke is imprisoned, how many smokes will his cellmate rent him out for?

nope-1004's picture

Take a listen to the LIAR here:



As far as liars go, he's pretty bad.  He can't stop jittering, shaking, and squirming.  Then he pulls the whole "I feel just like you and am totally mad at the banks".  Lmao.... he's a clown.


PRO.223's picture

"How can anyone be 100% sure of anything?"

When they're trying to fool you.

THX 1178's picture

Why would a jew try to fool me?

PRO.223's picture

Perhaps I should have said "fleece" you.

I am more equal than others's picture



I'm 100% certain everyone dies.


piliage's picture

ROFL for the obscure reference of the day!

But, are you 100% certain?

Herd Redirection Committee's picture

Greenspan, Bernanke, Geithner, Yellen, Einhorn....

Trust the experts.  Don't believe your lying eyes.

Arius's picture

Glad to hear he likes Hellen or Ellen not quite sure now what is her name ... the new chair FED ... at least we are in good hands, forget about the past ... yeah there were some problems but that is history now

WonderDawg's picture

A guy in his position who still claims that the Fed chair actually makes policy is either a fool or a liar.

Arius's picture

cant be a fool and make billions ... others will take it from you.


thats doesnt mean i agree with your statements about the Fed chair though ... nothing personal

WonderDawg's picture

Just stating the facts. Carroll Quigley probably said it best. To paraphrase, the chair of the Fed (and the other central banks) is an agent of the owners of the bank. You do know who owns the Fed, don't you?

Arius's picture

We the PEOPLE who else?

is Federal isnt it?

weburke's picture

those in most other countries should not take comfort in berns remarks. 

Mister Ponzi's picture

Sure, hyperinflation happens only after wars. I mean, the big war Zimbabwe was fighting with Venezuela...

WonderDawg's picture

Seriously? Jesus.

I'm going to assume you're serious. No, the Fed is not Federal. It is a privately held corporation.

These are the stockholders: http://www.save-a-patriot.org/files/view/whofed.html

Zero guest's picture

Wrong! The member banks own the Fed.

MontgomeryScott's picture


"Are you going to tell everyone what's going to happen?"




"Why the fuck NOT?"


"You really DON'T want to know, so don't ask."


"Are you trying to scare us, or is 'what's going to happen' going to be bad?"




"Is this some kind of movie script or something? I mean, you sound like fucking SATAN!" (laughs nervously, showing off his youthfulness in the presence of those who are millenia older than him)


"Have you ever heard the phrase 'Drink The Koolaid', and do you know where Guayana is; and have you ever heard of the C.I.A. 'useless eater' named 'Jim Jones'?"


"Well, I've heard the expression 'drinking the koolaid', and the people that do it are stupid, I suppose. The democrats and the republicans talk about it on the televisions. WHAT were the other two questions?" (looks increduously at the panel of 'experts')


"GOOD. Now, we're getting somewhere. You really don't know about Jim Jones?"


"Who?" (shakes head, trying to clear his mind of the cobwebs)


"See, you don't know stuff. Let US tell you about the way things REALLY are. You'll believe US, of course, dear boy."


"Will I be scared?" (cowering before his new master)


"Of COURSE not. LISTEN..."


Satan, laughing, spreads his wings:


Dickweed Wang's picture

Trust the experts.  Don't believe your lying eyes.

Real Eyes


Real Lies

old naughty's picture

I am 100% certain I am not certain if he played us or him, his "eyewitness".

Jugdish787's picture

I was about to put the same thing...fucking hysterical!


Mad_max's picture

alllllll  riiiiighty then!

10mm's picture

WW3 will not get new fodder. Just won't hsppen. Remaining fodder for sure.


813kml's picture

Thanks for the link, after a few clicks I ran across a Russian astrologer who in 2011 predicted that trouble would start in Ukraine shortly after the Sochi Olympics.  The same astrologer also predicted that Obama will be assassinated and WWIII will commence shortly afterwards.  That would be the mother of all false flags, something I hadn't considered but is definitely in the realm of possibility for the Banksters to get their war on.

StandardDeviant's picture

"Astrologer"?  Do you have any idea how crazy this makes you sound?

q99x2's picture

This isn't going to be a World War. It is the oligarchs and their mercenaries committing suicide.

They can't handle rejection.

svayambhu108's picture

Best perspective, love it, spending their pension money

Soul Glow's picture

I'm 100% sure Bernanke smells of sulfur.

dontgoforit's picture

If I had had dinner with Ben, I believe I would have had more to say than this....

Pretty disappointing - nothing here, really.

Murf_DaSurf's picture




If you picked up the Check, would you get any Desert?

JLee2027's picture

Why? I'm sure Ben made a call and had the check amount due printed.

Al Gorerhythm's picture

Einhorn's been Flimflamed by an expert. He was like just asking questions, like, that he got no reasonable answers to and he was like just perplexed. Like what are you, a 16 year old kid?

So, there wasn't a hint of hyper-inflation in Bernanke's world but then he doesn't have to worry about the 20%+ inflation of the money supply, particularly when it comes to placing food on the table, now does he David? Why didn't you question him on why there is a targeted inflation as policy by the CB and ask him how that (on a miserable CPI metric) affects the savers of the world using earned currency as savings?

Why didn't he ask him why they stopped publishing M3?

Why didn't he ask him if he was 100% certain the value of the currency will not depreciate over time?

Why didn't he ask him; If the Fed is able to withdraw from its balance sheet dilemma, then why did the Fed have to increase it in the first place, if they are oh so clever in managing their mandate (with 100% surety over the last 100 years)? The answer that would have satisified Einhorn would be that it was the market's fault or some such rubbish.

It sounds as though David was too kind, too polite or too fearful not to press the matter over dinner. 

Why didn't he ask him what the consequences were to savers and capital, with a Zero Rate policy, when the Fed can mandate to create quantitively endless quantities of currency that competes with the money locked up in a savings account or capital investment vehicle?

Why didn't he ask him why savers demand an interest rate of return on investments such as savings accounts and why savers have to accept the Fed dictated monopoly on interest rates as a return on investment. Why can't the saver rate the individual bank on its balance sheet performance and demand a return on that? Doesn't performance and risk play a part in this if a saver is now an unsecured creditor rather than a saver?

Did you ask him why he thought that the banks were the natural stimulator of the market (through extended credit, not capital or savings) and not the savers who actually had something to loan?

Einhorn wants to keep an open mind on the ability of the next flimflammer-in-control, so that he can deduce if the skittle-shitting unicorn called the Fed, can pull itself up by its own boot laces.

Wake the fuck up, Einhorn or fuck off out of it. You are wasting people's time or are getting too comfortable with the establishment and their cherished invitations to dinner.


dryam's picture

I will not be too critical of your post because I share your emotional outrage towards Bernanke. However, Einhorn had to behave in an unassuming manner or otherwise he wouldn't have gotten anything from Bernanke. It's better to play stupid and passive & see what may or may not be said. I think Bernanke's (non)answers were very revealing. Had the questioning been aggressive in the least bit the faucet would have shut off completely & Einhorn would never get a second chance.

Btw, I liked the part about war being one of the situations were there can be hyperinflation. Russia is poking the US & China is poking away at Japan & now Vietnam all while Russia & China are solidifying their alliances on nearly a daily basis.

Al Gorerhythm's picture

My outrage isn't so much a measure of Bernanke's role in this, he's just a minion and Quisling (based on his earlier publications about gold as real money and a safeguard for one's stored production against theft through inflation). No, my outrage is directed against the Fed and their crony conmen accomplices in Congress. My outrage is usually restrained to posts such as my previous. However, don't you think it's past the time that we quiver in our boots in fear of these conmen and start treating them with the disdain that they deserve? Everyone?

It's a matter of servitude. You either tug your forelock and mumble platitudes or speak out and destroy their assumed credibility. Einhorn is in a position to do so and it's his duty to do so, if he is American or honorable.

How many wars do we need to fight for them? How many men, women and children have to die or suffer for them in order to satisify their sociopathic desires? How much of our wealth and sovereignty do we have stripped before we say, enough? Bundy stood up! It's time for these paper pushers or paper chasers to do the same. 

Rise up! It was good enough for the founding fathers. The same situation exists now.

Oh, as a measure of my outrag; I was remiss in my previous posting; Fuck you, Bernanke, you Quisling traitor, bought and paid for slut. Invite me to dinner sometime, you lower than shark shit, bottom dweller and I'll ask you a few questions.

I'll reserve my outpourings for congress and the Fed (The Cabal), or I'll be here all day.

raeb's picture

yes, but are you 100% certain of what happens after that?

JLee2027's picture

I'm 100% certain everyone dies.


To be technical, Enoch was translated by GOD and did not die. 

Genesis 5:24 Hebrews 11:5


See? There are always exceptions!


Memedada's picture

I'm very close to 100% sure that that's not a reliable source...

James_Cole's picture

I'm 100% sure there's a 99.9% probability all religions are fictional. The holdout .1% is for the mormons, please dear gawd let that one be true. 

ATM's picture

I am 100% sure that I have had a conversation with a dead person and that someone else had a conversation with that same dead person and was told the same thing. Perhpas that'ss not "religion" but I know for a fact there is an afterlife. 

Memedada's picture

How can you be so sure? Maybe, in the end, we're just walking up...

Gazooks's picture

and maybe we're just waking to the realization that we're allready dead, like boiled frogs


what's more hellish than being there, languishing slowly and simply not knowing it?



PartofOne's picture

If you view yourself as an individual cell, then yes you will die (physically).  If you view yourself as part of a continuum (i.e. cell of a body) doing your part to ensure the survival of the host/body/universe of that which came before you - you will be immortal (spiritually).

Once you die (mentally), you are truly happy (physically, mentally, & spiritually).  If you are fortunate and know the signs to look for, you may run across some of these people as they are usually quiet and often seen with smiles on their faces.

Learn to feed both wolves; you will never know which one you will need.


PiratePiggy's picture

"I'm 100% certain everyone dies."


That was before Obamacare.