The Blob

The US federal deficit reminds us of the 1958 science fiction horror classic, "The Blob." It stars none-other than Steve McQueen, in his first leading role. The blob is an amoeba-like alien creature that crashes to Earth from outer space and feeds on humans, getting bigger and bigger with every bite.

The federal deficit is getting bigger and bigger devouring more and more funds in the capital markets (chart). It hasn't killed anyone yet but it might one day if investors decide they don't want to keep feeding it. The resulting back up in bond yields could kill the economy and lots of investors.