Mega-hedge fund manager Michael Steinhardt spoke to CNBC today about why he thinks QE2 is a failure and what he'd do about it.

Bernanke's QE2 fails because, Steinhardt says, we don't have a problem in commodity prices, we have one in employment and wages. And what Bernanke's doing isn't going to help that.

Look at our situation says Steinhardt:

"Governments are bloated, Republicans are in control of congress, the President shot his wad with the stimulus. So where's the money going to come from? You can only raise taxes so much."

What does all this mean?

"I would certainly be short the debt markets - they're just glaring at you."

Here's why he would short Treasuries:

"The 2-year Treasury yields slightly lower than 50 basis points. Inflation is 2%. The economy (the consensus is) going to grow 2.5%. I dont remember a Treasury yielding half one percent in my lifetime."

And here's his response to the question, "Is QE2 going to work?"

"Why would [Bernanke] pick on inflation when the level of inflation is marginally below that which he seems to want. To do anything to change that is only going to impact commodity prices and CPs are largely going to help countries that are supplying things to us - not us."

Watch below: