Deflationary Threat

Remember, here's the game. The financial system is on life support. We won't know the extent of the damage for at least two more years. Until then, the government will be lending free money to the banks (whether through the discount window at the Fed, or through purchases of agency debt -- which provides liquidity to the lending market). That's just how it's going to be.

To prevent dollar destruction, we will see propaganda against oil and we will see continued worry about deflation.

How to invest in this climate? Don't. If you must, just go beta.

See Mishkin's take:
http://www.cnbc.com/id/33308407