Mish: Instead of having dinner with those that caused the problem and have no idea how to fix it, the powers that be should have instead sat down with the top 20 economic bloggers as to what to do. We have been warning about these problems for years.
Volcker, for his part, says the current crisis has its roots in the lack of restraint inherent in the highly leveraged system that evolved, one in which winners were rewarded exorbitantly but the inverse didn't seem to hold.
"The first panacea for a mismanaged nation is inflation of the currency; the second is war."
-- Ernest Hemingway, Esquire magazine, September 1935
"Price stability is something which is essential for the poorest and the most vulnerable of our citizens. They cannot protect themselves against inflation. It is extremely important that we understand that moderation today is necessary if we want to deliver price stability in the medium term."
- European Central Bank president Jean-Claude Trichet, April 2008
Volcker speech
Makes a lot of sense. The Obama endorsement is a little scary but not really inconsistent with the Volcker approach. He is hardly an honest money advocate. He supports the fiat regime but with more taxation rather than easy credit. Easy credit now benefits primarily the already wealthy. In the past there was a benefit for average Joe. Now Volcker and the Democrat party regulars see that this game is over. Only increased taxation can support their agenda now. People are, of course, quite mistaken if they believe tax increases will only affect the wealthy.
There is a minority of Democrat party members who might go along with the hyperinflationary solution hoping this would lead to complete Socialism but I think most realize this will only lead to the total disintegration of the USA.