LONDON, England - December 26, 2010 - America is storing up a second financial crisis by keeping interest rates at record low levels, according to David Einhorn, the hedge fund manager who first publicly warned about the financial catastrophe facing Lehman Brothers.

"The crisis that required zero interest rates has passed," said Einhorn, who co-founded and runs Greenlight Capital, a $6.5 billion fund. By not raising rates "it increases the chance that governments will over-borrow and fall into a debt trap".

The criticism of the Federal Reserve comes as it embarks on another $600 billion of quantitative easing - or printing money - in an effort to fire up a recovery next year.

Interest rates around the western world, including in Britain, have sat at or below 1% since the near collapse of the financial system in 2008 triggered a global Depression.

"If interest rates ever do go up again, you have another crisis," Einhorn told The Sunday Telegraph.

Those in favor of very low interest rates point to the support it has given the real estate market in the U.S. and that, as in the UK, it should encourage politicians to begin to tackle the $1.3 trillion budget deficit without fear of damaging the economy.