Hank Paulson wants to spend $700 billion to buy up banks bad debt in the hope it can ‘fix’ the crisis on Wall Street.

The audacity is breathtaking. It requires just $100 billion less of the cost of the war in Iraq to date. Moreover, it is a stunning power grab by the Treasury secretary who, if the bill is passed, will be granted “the most incredible powers ever bestowed on one person over the economic and financial life of the nation.” (The New York Times.)

But there are ways to profit from the madness. Martin Hutchinson has picked three winners.

The U.S. Personal Consumption Expenditures deflator, believed to be the primary gauge of inflation for U.S. Federal Reserve Chairman Ben S. Bernanke, rose 0.8% in June.

The inflationary reality that we as consumers have been living for months may finally be starting to dawn on the U.S. Federal Reserve.