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
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.
Pending home sales is one of the main
inflation indicators in any economy sense, it measures consumers’ willingness
and ability to pay their money to buy new homes and sign real estate contracts.
