While the Federal Reserve has the theoretical power to force the resumption in credit expansion by monetizing enough public debt that the losses from the housing bust are wiped away, it is unlikely to do so. The Fed was created for the benefit of the banking class, and while it remains under the control of that class it will not pursue a policy that would lead to a breakdown in the monetary system from which the banking class profits.
His class analysis makes sense, unless a wide swath of the banker class finds a way to profit from hyperinflation. If they don't, they'll fight it tooth and nail; if they do, they may prefer to roll with it instead.
The way the banking system in the U.S. is set up now, the bigger banks may decide to roll with it. Losses on fixed-rate loans, which would be caused by hyperinflation, can be made up for by trading profits. There's also the possibility of TIPS-style loans coming in: i.e., loans that carry a rate of 4% plus the CPI with the remaining principal adjusted for inflation too. Such a loan would be like a one-year term whose amortization schedule would be recalculated with the new inflation figures factored in. The schedule could be adjusted as frequently as every month, provided that it's paid monthly.
TIPS-style loans becoming prevalent would also cushion an economy against deflation. The interest rate and principal would adjust downwards in such a case.
Of course, there's also the option of refusing to lend except with short terms, even for a long-duration loan like a mortgage. The TIPS option, however, is more palatable because it offers a quasi-fixed rate.
If inflation comes along, we may see such loans blossom in the private sector. There's already a precedent, in TIPS themselves, and the idea's easily adaptable to loans...even if less straighforwardly to self-amortizing ones.
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