U.S. reached the deadline
Shutdown consequences on U.S. economy
The shutdown consequences appear all over the world markets, currencies, commodities, bonds, and even consumer goods.
“Time’s running out.” Obama started his speech yesterday before the shutdown. Why?
First of all, we have to start with the U.S. economy and we have talked yesterday about the potential actions that will be taken during the shutdown and we can summarize it by “800K governmental employees went home in unpaid leave, and unpaid working days for other kept employees”.
As the federal bank of U.S. and HIS Inc.; $15.7 Trillion economy size, $300 Million daily cost, and 2 weeks are more than enough to downgrade the growth of the economy by 1.4 percent which is much higher than an annual rate decline and Obama refuses to hold the blame alone, he is throwing it to republicans.
During the partial government shutdown, many essential government operations will cease. Internal Revenue Service call centers will close and more than 90 percent of Environmental Protection Agency workers will stay home. National parks and museums will be shuttered. Other services will continue uninterrupted. Social Security and Medicare benefits will be paid. U.S. troops will remain at their posts around the world and will be paid under a bill Obama signed yesterday. Air-traffic controllers and airport security screeners will keep working.
Timeless State and Men
Obama trying to present his opponents as who want to get U.S. economy and future in risk and blaming them about this action, that will flash back our minds 17 years back when Clinton stuck into the same situation in (1995 – 1996). While Clinton chided Republicans for putting “ideology ahead of common sense” in a 1995 address, Obama told reporters yesterday that “House Republicans continue to tie funding of the government to ideological demands.”.
“One function of one party in one House of Congress and in one branch of government doesn’t get to shut down the entire government just to re-fight the results of an election,” - Obama said.
Congress and Obama have been at loggerheads on fiscal policy since Republicans won control of the House. They took several disputes to the brink, including a potential government shutdown in April 2011, the debt ceiling in August 2011 and the expiration of tax cuts in December 2012. In each case, lawmakers reached an agreement to prevent the worst possible outcome. Most recently, the House passed a tax bill Jan. 1, hours after income tax rate increases took effect. Different time, different men and the same situation and still the question how long U.S. will carry this?
The Core Business Points
Minutes before the shutdown we had obvious differences in the markets; sense crude oil got 3 months low with $101.84 per barrel, as unusual low in this time of the year.
Swiss franc got gain during this month, as Yen and Sterling did so, but Euro did not make it due to Italy unemployment rate announcement and Germany new GDP reduction policy.
Gold seems to be the loser in this economic ware not just because of U.S. news but because of the Indian imports article - the largest Gold consumer in the world – which announced that an Indian imports of gold decreased by 13 percent this year.