This video is priceless...And these idiots make monetary policy...

One of the Fed's more arrogant former apparatchiks (of the "100% confidence" interval) Larry Meyer, currently at expert network Macroeconomic Advisors which is used by the likes of Pimco to get inside information on what the Fed will do at its upcoming meetings, appeared on CNBC earlier and attempted to school David Einhorn on "Economics 101." What ensued was yet another confirmation that these Ph.D's (a term we always use in the most pejorative, NC-17 context possible) who destroyed the world, have absolutely no idea what the hell they talk about, and make up bullshit scenarios on the fly. Luckily, it has gotten to a point where every incremental statement catches them in one lie or another. It has become grotesquely comic to watch their faces (as in Bernanke of 60 Minutes infamy) squirm as they realize that the end of the system they created and subsequently destroyed, is near.
A selection of Einhorn's questions:

• "Part of the issue with the deflation is companies improve the quality of their products, so last month the PPI went down because we had a new car year, and they sold you a better car for the same price. Now why is it the Federal feel like you need to have a policy response to auto companies making better cars and selling them to you at the same price? Why do we need to drive up the cost of energy, and food, and cotton, to offset that?"
• "I think if you drive up food and energy prices, which you don't count in the core PPI or CPI, I think if you don't count those things in the inflation, you may miss the inflation, and if people have to spend more money on food and energy, they have less money to buy other things, and that could prove to be a net reduction in economic activity..."

And while he is unable to respond to any of these (or other) all Meyer can do is assume the claim that easy monetary policy stimulates aggregate demand as factual, where Einhorn put the smackdown: "I think you can argue that, because we have gotten to the point where the transmission method [sic] is broken. You are trying to create a wealth effect which is another asset-based economy thing, it's very questionable whether higher stock prices cause lots of incremental demand, and you have the cost of food and energy which are real things that people have to pay for. And if you have to pay $3, $4 or $5 for gas, you have less money to go out to eat." Meyer's response once again: is nothing less than derisive laughter with no facts to support his claims whatsoever... except for falling back to Econ 101... which of course is not a science.
Lastly, Einhorn says: "I am worried about a bubble in corn and oil." The response - blame it all on China. "Commodity prices will go up but it's driven because Asia and China have adopted US monetary policy which is crazy for them. Absolutely crazy.  And we can't do anything about that." And confirming our long-established theory that the Fed is doing nothing less than punishing the American people in order to get China to blink we hear the following from the entrenched demagogue: "That's no reason why we should keep interest rates higher, to benefit China and Asia, and prevent bubbles there, they have to do it themselves. Look in the mirror if you want to know whose problem this is."
So true: so let's create hyperinflation in the US, in the hope that Beijing will finally unpeg. It's official: the Fed is willing to sacrifice its people in order to win an intercontinental pissing match of a flawed and dying economic theory.
As for Larry, we are confident he will survive long after his entire life is proven to have been a hollow defense of a failed ideology: after all he is one of those "fly on the wall" Fed consultants who gets paid by the PIMCOs of the world to leak inside monetary information to the highest bidder. We would love to know: now that the Gerson Lehrman model is over, when will the true leak of critical inside information: companies such as Macroeconomic Advisors finally see either a subpoena by the AG or an FBI raid... After all what they do is identical to what all those other expert networks do day in and out. Only this time the stakes are that much higher (and the pool of beneficiaries that much, ahem Bill Gross, smaller).