$8 Trillion for the Financial Bailout. Nice Holiday Gift.
As if we needed any more evidence that this financial bubble is one for the history books.  The government has now committed the American taxpayer to roughly $8 trillion.  We’ve already used up over $2 trillion and the risk is absolutely amazing.  Can you believe the state of California is now a higher credit risk than Slovakia?  Yes we are now going off into unknown territory. Take a look at this disturbing graph from the New York Times:
Family Budget: How to go Broke on $100,000 a year. Why the Middle Class has a hard time Living in Expensive Urban Areas.
One of the challenges during this economic crisis is budgeting. As much as we hear about the housing collapse or the stock market seesawing like a playground, we rarely get a glimpse into the actual budget of real live Americans. Sure we know housing is expensive. We all intuitively knew that $147 a barrel oil was not going to be good on our economy. But how does this translate into the monthly budget of a family trying to get by?
The Menace that is Deflation: 5 Specific Areas Where Deflation is Already Showing up.
Be very afraid of the “D” word now making the rounds in economic circles. Today the Federal Reserve hinted that we are now tipping into the prospect of deflation. This is very bad from their perspective. In fact, it is a horrifying prospect for the Federal Reserve since every action they have taken in this decade has had the desired outcome of inflation. Why would the Fed want inflation? Inflation would make our structured debts cheaper as time goes by since the price level of most items in the economy would rise and the debt would remain static. First, let us get our definitions clear.