April 9, 2008 (LPAC)--Just ahead of the spring meetings of the G-7 finance, IMF and World Bank in Washington, the International Monetary Fund has joined the imperial chorus calling for western governments, and the United States in particular, to bail out their banks. IMF managing director Dominique Strauss Kahn has in recent days made public statements in favor of such a bailout, and the IMF's Global Financial Stability Report and its World Economic Outlook, issued yesterday and today, respectively, support that point, by pushing the lie that the global financial crisis was caused by a combination of a U.S. housing crisis and "profound errors in risk management among its leading financial institutions." This U.S. problem, the IMF maintains, is dragging the rest of the world down, an argument which implicitly supports a bailout. The IMF even quantifies the "total potential losses" to financial institutions and other investors at $945 billion. (Note to IMF: Talking about billions when quadrillions have vaporized, is not particularly convincing.)

How to sell this bailout to the public will be one of the top items discussed at these meetings of bankers and finance ministers. The financial system was able to survive--though in appearance only!--by a series of extraordinary actions by the Fed in mid-March, including the open rescue of Bear Stearns--and now the banks are scrambling to put together a rescue package so they can keep their doors open for the second quarter. The layer of financial parasites which grew up around the bubble, and the politicians these gamblers fund, are desperate to have the government bail them out, and are rushing headlong into a British hyperinflationary trap. If the commercial and investment banks don't get a bailout, they will rapidly disintegrate, but if they do get a bailout on the scale needed to save them, the result will be a Weimar-style hyperinflationary blowout in which the dollar itself disintegrates. Either way, the U.S. collapses.

Trying to protect a dead financial system and its make-believe paper assets is not only foolish, it is suicidal. The U.S. Government must act, but do so to put this financial system through bankruptcy proceedings via LaRouche's Homeowners and Bank Protection Act. The bankers have no solution: when the solution begins with a flea dip, you can't trust the fleas to design the plan.