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"Another US government shutdown is coming, and markets are treating it like any other Wednesday. Been there, seen that 21 times before. But they might be missing the real story. A bombshell memo from the Trump administration has revealed a plan to weaponise this shutdown in a way that's never been done, turning a temporary crisis into a tool for permanent change. Tune in for the full story."
~ Coin Bureau
The video examines the looming US government shutdown, noting that financial markets typically dismiss it as a predictable political event, having occurred 21 times since 1980. Historically, shutdowns evolved into a strategic tool for political leverage, most notably during the 2018-2019 period, where the 35-day duration resulted in systemic breakdowns, including disruptions to airport security and food inspections, and cost the US $11 billion in GDP. However, the current situation is made more serious by an Office of Management and Budget memo instructing federal agencies to prepare for permanent "reductions in force" (RIFs) rather than temporary furloughs. This move is seen as weaponizing the shutdown to eliminate specific programs not favoured by the administration, effectively transforming the temporary crisis into a tool for lasting governmental change.
Despite the constitutional drama, markets remain unfazed, consistent with historical data showing that shutdowns rarely correlate with major crashes in the S&P 500, as core economic drivers and mandatory spending remain intact. The video argues, however, that markets may be overlooking the long-term consequences, as credit rating agencies have begun citing "governance erosion" and fiscal brinkmanship when assessing the US credit outlook, which could eventually lead to permanently higher government borrowing costs. Furthermore, the economic damage, though diffused and not reflected in stock indices, is significant, causing lost economic activity for federal workers, small businesses, and government-dependent communities. The compounding GDP loss from a prolonged shutdown poses a genuine threat of tipping a slowing economy into recession, and the current political confrontation serves as a potential preview for the far more dangerous debt ceiling fight on the horizon.
0:00 Intro
0:58 The Shutdown Machine
3:41 The 35-Day Preview
7:45 What's Different This Time
12:26 Why Markets Don't Care… Yet
16:00 The Damage
20:04 America Crashing Out
Source - Coin Bureau YouTube: https://www.youtube.com/watch?v=n_zbO_wdaoI
Disclaimer: This video is provided for informational purposes only, and not offered or intended to be used as legal, tax, investment, financial, or any other advice.
