You can’t cure a bubble by reflating it, says Bill Bonner. But that won’t stop the Obama administration from trying. Bill says we should get ready for trillion-dollar budget deficits, huge infrastructure programs, and bailouts for “brain dead” businesses. But none of this will be able to stop the economic correction that has to happen.

This from The Daily Reckoning:

Sunday afternoon, we sat down in the large leather chair in front of the fire. Its arms were shiny and worn…much lighter in color than the rest of the brown chair.

Immediately, we felt wiser. Then, a blindingly bright flash of insight seem to come out of nowhere. Suddenly, we saw into the dark heart of the beast itself – and peered into its soul. And then, we watched in horror. In our mind’s eye we saw images of recession… depression… despair… desperation… and finally upheaval…in which the whole system…the world’s dollar-based money system…came crashing down.

Yes, dear reader. We are a proud heir to Dr. Kurt Richebacher. Not of his weighty intellectual career in economics. We are heir to his chair. After he died, his estate sold us his chair. We keep the Dr. Kurt Richebacher chair in our library. Sitting in it this weekend, we thought we saw the whole financial crisis more clearly.

“The only cure for a Bubble is to prevent it from developing.” said Kurt Richebacher .

In other words, you can’t cure a Bubble by cutting interest rates, easing bank lending requirements, running bigger government deficits, sending out ‘rebate’ checks, buying up Wall Street’s stupid mistakes, or bailing out sinking businesses. You can’t cure a bubble by reflating it. You can’t cure a bubble at all. You have to let it pop…and then go about your business. Get it over with quickly; that’s the best you can do.

Think that will happen? Where have you been, dear reader? Out of blackberry range?

No, the feds are at work – with their patches, their rescues, their bamboozles and their swindles.

In our brief moment of clarity, induced by the Richebacher chair, we saw what was coming – the biggest financial bailout of history. It will be like WWII, without Betty Grable…like the New Deal without the wheelchair – and like nothing we’ve ever seen.

Saving America from free-market capitalism will become the Great National Project of the Obama years. Deficits will top $1 trillion…maybe $2 trillion. Brain dead businesses will be kept alive. Whole industries that should be allowed to go broke will be protected. Towns, states, and colleges that should go bust will be propped up. There will also be a huge building boom – in infrastructure. Bridges, trains, highways…

… it may be time to buy cement companies!

The bailouts are just money down the drain. As for the bridges, who knows whether they are worth the money? But this massive program will achieve its real purpose – distracting and diverting Americans from their loss of wealth.

Source: Millions Of Mistakes Need Correcting

Last 5 posts by Bill Bonner

• The best way to get through a debt crisis? - November 5th, 2009
• Gold Touches a New Record - October 9th, 2009
• The Eternal Depression - October 8th, 2009
• The Rally Rests on a Knife-Edge - October 1st, 2009
• A Century of Bad Ideas - September 30th, 2009