"In a period like this, the way you make money coming out of it is to own the things where the fundamentals have not been impaired." Such are the words of investment guru Jim Rogers.

In a quick yet effective interview with CNBC, Jim Rogers laid out his concerns about the way in which boiling financial troubles are being handled. Rogers lays responsibility directly at the feet of Ben Bernanke and crew, with a side plate of crow for some of the biggest Wall Street talking heads. Rogers warns that the practice of throwing cash at this problem, with the intention of providing liquidity from the top down, is an unquestionable recipe for inflationary disaster. I would hasten to agree with him.

Jim Rogers indicates his opinion that this entire economic disaster needs to be allowed to self adjust. In the mean time, he counsels investors to be carefully placing their money in positions which, while possibly being liquidated, remain fundamentally sound. He points at commodities, which are physical retainers of true value, as instruments of some protection. He does indicate though, that he has taken some losses in commodities. It is my opinion that commodities are currently swinging downward on profit taking and shall soon begin another upward phase.

Rogers also gave his opinion that the G7 needs to have a beer and leave this mess alone. He sees the artificial propping up of world banks as futile. "We had the worst excesses we had in credit markets in world history. We're going to have to take some pain," Rogers told CNBC.

It's like this, folks: If you built a dam, and after the dam was full you discovered that there was no mortar between the bricks, you wouldn't build a new dam in front of the old one, hoping it would hold when everything lets go. Instead, you would warn the people in the valley about what was coming and you'd let the dam collapse. Then, you'd try to control the carnage and you'd build a better dam ---- using different contractors.

But of course, that's just my opinion.

Nouriel Roubini, the once obscure New York University economics professor who two years ago predicted the current global financial crisis, now says leaders of the world's major industrialized economies and developing countries must implement an 'all fronts' approach to avert a financial calamity and a global depression.

"It will take a significant change in leadership of economic policy and very radical, coordinated policy actions among all advanced and emerging-market economies to avoid this economic and financial disaster," Roubini said on his web site, RGE Monitor.

Roubini urged that national policy makers take immediate action to end the crisis, which has dramatically tightened credit conditions worldwide, constraining the ability of corporations to undertake daily operations, which will hurt GDP growth rates in every region.

And, ironically or by coincidence, leaders will have an opportunity to dialogue and implement a common strategy: officials from the International Monetary Fund, World Bank, and Group of Seven (G-7) nations meet in Washington, D.C. this weekend for their previously-scheduled annual meeting.

While you were sleeping, Asian markets followed the U.S. down. Japan's Nikkei lost 9.6% as a real estate investment trust and an insurance company -- Yamoto Life -- filed for bankruptcy. Markets in Hong Kong, Korea, Australia, Singapore and Thailand fell between 6.5% and 8%. In Europe, markets opened down 10%. Fear is rampant with the volatility index (VIX), a measure of fear, closing at an all time high of 63.92.

By chance, there is a meeting of G7 finance ministers in Washington this weekend, and there will be a push to do something by Sunday night. I think it would be a triumph if everyone in the meeting could agree on a common definition of the key problem: the freezing up of short-term lending markets (the TED Spread, a measure of short-term lending risk, hit a record 4.23%), the lack of capital in the global banking system, or investors fleeing the stock market.

Why would this help? Part of the reason that global efforts so far have failed is that there does not appear to be a common understanding of what is wrong and what it will take to fix it. This has been reflected in uncoordinated tactics -- flooding the markets with liquidity, cutting interest rates, guaranteeing money market funds, injecting capital into banks -- in the UK only -- and our DOA $700 billion reverse auction plan.

If overnight interest rates do not fall as a result of the Fed's guarantee for commercial paper and related efforts to create incentives for banks to lend, the leaders of world's central banks and treasury departments may have to try a more creative approach to end the financial crisis: a global distressed asset summit.

As economist David H. Wang told BloggingStocks Wednesday, the major economies may have to hold a global 'out & price' summit to get distressed and bad assets -- the source of so many of the defaults and resultant fear among banks -- out of the financial system.

The problem, Wang said, is not just that the subprime and Alt-A mortgage backed securities represent distressed and bad debt, it's that "banks and other financial institutions can't determine the value or price of many of these securities."

Unknowns about toxic assets driving fear

Wang believes that "lack of certainty about price is the biggest factor in banks' unwillingness to lend."

"Banks can't determine the price of these assets, it represents a big uncertainty, therefore because they're uncertain regarding what their competitor banks hold, they aren't lending, and they're charging higher rates for short-term loans," Wang said. "Both are restricting commerce and will continue to slow economies all over the world if the problem is not addressed."

Just call it an endorsement of a collective security policy where 'you go first.'

That was how one economist characterized the G-7 group of finance ministers' stance toward the U.S. Treasury Department's proposed $700 billion intervention to stabilize the financial system.

In a conference call statement, the G-7 - - Germany, the United Kingdom, France, Japan, Italy, Canada, along with the U.S. - - said, "We strongly welcome the extraordinary actions taken by the United States to enhance the stability of financial markets and address credit concerns, especially through its plan to implement a program to remove illiquid assets that are destabilizing financial institutions," The Wall Street Journal reported Monday(subscription required.)

However, none of the other six G-7 members will adopt a program similar to the U.S.'s, German Finance Minister Peer Steinbrueck told reporters in Berlin after the call, Bloomberg News reported Monday.

Economist Peter Dawson told BloggingStocks Monday the G-7's stance is half-hearted, in his interpretation. "In its general statement, the G-7 is on-board with the [U.S] Treasury's program but [German Finance Minister Peer] Steinbrueck's comments are disappointing. Steinbrueck, or another G-7 representative should have followed up with 'and we stand ready to assist the United States and other nations with fiscal measures to support the above goals, if needed, etc.,' " Dawson said. "Right now, the G-7's tone is 'go forth U.S., but we're not getting in the pool right now, the water's too cold.' Given the G-7's complicity in causing the problem and their systemic interest, a more-engaged statement should have been issued regarding fiscal policy options."

Cites AIG's 'interconnectedness'

For example, Dawson said the G-7's corporate involvement in American International Group's (NYSE: AIG) is evidence item 'A' for stronger G-7 involvement. "G-7 companies, banks, and institutional investors benefited from AIG's credit default swaps and related products, and would be hurt by a systemic failure. Since they are parties to the problem, they should also bear some of the costs of the reforms and bailout," Dawson said. "But right now their stance is 'Go ahead U.S. We back your spending your money, but not ours.' That's an inadequate response from our G-7 associates."

The members of the G7 admit that the global economy is in real trouble. Now they are asking themselves whether they can do anything about it.

Officials at the G7 summit did say that interest rates will have to come down. An official from the European Union said that taxes could be cut further. Many in the private sector don't think this can offset problems in the credit markets. "The problems are going right through all parts of the financial markets and there's not much the G-7 can do about this,'' said Gilles Moec, an economist at Bank of America Corp. (NYSE: BAC), quoted by Bloomberg.

To say that large governments cannot dampen the downturn is cynical. Whether they will act quickly is a very fair question to raise. A sharp cut in personal and corporate tax rates and more drops in interest rates are likely to cause a pick-up in economic activity. It is also almost certain to cause inflation, but that may be the price that must be paid to keep a severe recession at bay.

The slowness of governments is the enemy now. If the G7 countries can't get tax and rate stimulation packages in place during the current quarter, it will almost certainly be too late.

Douglas A. McIntyre is an editor at 247wallst.com.