LILA RAJIVA: The Mind-Body Politic

Better Than Bail-Outs

October 3, 2008

Posted in: Art and Ideas, Economy, Empire, Finance

The market needs deflation, as the natural end of excess, says Barry Brownstein. If we try to avert it by intervention, we will end with something much worse - hyperinflation.

“If, on the other hand, the reactionary forces prevail, more money will be thrown after bad; foreigners will withdraw from our capital markets; and eventually, a hyperinflation will begin. In that terrible scenario, it is likely that the United States will split apart; and many cities will descend into anarchy. You can see why I prefer the deflationary depression.”

And the Republican hold-outs in the House came up with a few ideas of their own:

*Suspend capital gains for two years (boosting global competitiveness and upping stock prices)

*Denationalize and privatize Fannie and Freddie
*Waive mark-to-market”

*Strengthen the dollar”

That’s from a post by Deroy Murdock at Human Events.

Comment:

We’ll get one of those - mark-to-market will go. And maybe some tax cuts. But don’t hold your breath for a strong dollar or privatizing F&F. My bet’s on hyperinflation…