May 10 (Bloomberg) — Governments will only bring about an end to the credit crisis through the “blood, sweat and tears” of cutting the amount of public debt, “Black Swan” author Nassim Taleb said.

“The crisis came from debt and you don’t escape it with more debt,” Taleb said in an interview on Bloomberg Radio’s “Bloomberg Surveillance” today. “We’re in a situation where we had a patient who we discovered had cancer a year and a half ago and all we’ve been giving the patient is painkillers. The tumor is getting worse because we are transforming private debt into public debt and public debt is not manageable.”

Taleb, a professor at New York University who also advises Universa Investments LP, a $6 billion fund that bets on extreme market moves, said the financial system faces risk from increased complexity, and President Barack Obama should work with U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben S. Bernanke to cut debt.

“My fear is if we don’t stop them now they’re going to create hyperinflation,” Taleb said. “Nobody has confidence in a guy like Bernanke.

The Wall Street Journal’s Scott Patterson and Tom Lauricella have a delicious story tonight that is too good not to believe.

The nut is that a fund linked to Nassim Taleb — Mr. Black Swan — may have placed the initial trades that got the ball rolling for Thursday’s violent selling.

On any other day, this $7.5 million trade for 50,000 options contracts might have briefly hurt stock prices, though not caused much of a ripple. But coming on a day when all varieties of financial markets were deeply unsettled, the trade may have played a key role in the stock-market collapse just 20 minutes later.

The trade by Universa, a hedge fund advised by Nassim Taleb, author of “Black Swan: The Impact of the Highly Improbable,” led traders on the other side of the transaction—including Barclays Capital, the brokerage arm of British bank Barclays PLC—to do their own selling to offset some of the risk, according to traders in Chicago.

Intriguing!