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9.29.23 - Gov't Shutdown: An illustrated guide

Gold last traded at $1,848 an ounce. Silver at $22.19 an ounce.

EDITOR'S NOTE: A great, to-the-point summary of what next week may look like and what it will mean for us, for government workers and for the economy. Let us hope - for the sake of the country and our economy - this is resolved quickly.

What happens if the government shuts down: An illustrated guide-CNN

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With Congress barreling toward a government shutdown, many Americans are wondering how it could affect them. Here’s a guide to what you can expect.

What is a government shutdown?

A government shutdown happens when Congress doesn’t approve funding for the federal government by the time the new fiscal year starts on October 1. Each year, Congress must pass the 12 appropriation bills that make up the discretionary spending budget and set funding levels for federal agencies.

What happens during a government shutdown?

If lawmakers fail to enact all or some of the appropriation bills, many government operations grind to a halt, resulting in a full or partial government shutdown until Congress acts. However, government functions that are deemed essential will continue.

Each federal agency comes up with a contingency plan that outlines which of its functions will continue during a shutdown and which will stop, as well as how many of its employees will continue working and how many will be furloughed until the shutdown ends.

What it means for you

Because many federal workers are off the job during a government shutdown, many services are stopped or slowed, disturbing the day-to-day life for many Americans.

Notably, Social Security payments to seniors, Americans with disabilities and others would continue to be distributed. The Postal Service will also continue regular service.

Here are some examples of how a shutdown could affect you. SEE MORE

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9.28.23 - Should the possible shutdown concern you?

Gold last traded at $1,865 an ounce. Silver at $22.61 an ounce.

EDITOR'S NOTE: Should investors be worried about this government shutdown? Will this one be worse than the others? Only time will tell but the stakes are much higher this go-around. Now is the time to take defensive action to be on the safe side. This is why Swiss America recommends a portion of your assets be hold in physical assets like precious metals; to weather whatever storms come due to political inaction. If this shutdown comes to pass, it has the potential to be one of the longest, and as Mr. Rickards puts it, "that could do serious damage to an economy that’s already on the edge of recession."

Toward the Brink -Daily Reckoning

by James Rickards

shutdown Should market participants be concerned about the possible government shutdown at midnight on Sept. 30?

It’s too soon to answer that question definitively, but it’s not too soon for investors to take some defensive action.

If it does happen, it’ll be different from those that have gone before. Let’s break it all down…

While most of us keep our books and records on a Dec. 31 fiscal year, the U.S. government is different. The U.S. fiscal year runs from Oct. 1 until midnight on Sept. 30.

The fiscal year is dated by the calendar year in which the last day falls.

So the fiscal year beginning on Oct. 1, 2023, is called “Fiscal Year 2024” by the Government Accounting Office (GAO) and the Office of Management and Budget (OMB). Leave it to the government to make things difficult and hard to follow, but that’s how they do it.

That means fiscal year 2023 ends at midnight on Sept. 30, 2023. We’re up against the clock and that’s why you’re hearing so much about a government shutdown right now.

It’s the job of Congress to pass appropriations bills to keep the government open. Under so-called regular order, each major department has its own appropriations bill. So there should be separate bills for Defense, the State Department, the Department of Education and so on.

Each bill should be voted on separately and each bill should pass before Sept. 30 to keep that department and the government as a whole running in the new fiscal year.

But in the real world, the “regular order” process never happens. Typically, the House and Senate and the two parties in each body can’t agree on anything by Sept. 30. READ MORE

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9.27.23 - Cashless Society: "It's Not Coming; It's Already Here"

Gold last traded at $1,875 an ounce. Silver at $22.55 an ounce.

There's a 90% chance of a government shutdown: Goldman Sachs -Yahoo! Finance

It's that time of year again ... government shutdown season. This one seems like an inevitability so now the question is, how long will it last? These threats of shutdowns - and actual shutdowns - do seem to somehow resolve themselves with little fanfare, but that doesn't mean the economy hasn't lost billions while our elected officials play politics.

by Ines Ferré and Ben Werschkul

The chances that the government avoids a shutdown in the next three days are not looking good, according to Goldman Sachs economists.

“A shutdown this year has looked likely for several months, and we now think the odds have risen to 90%,” Jan Hatzius, chief economist and head of global research at Goldman Sachs, wrote in a note to investors.

Hatzius and his team say the most likely scenario is the government will shut down on Oct. 1.

On Tuesday evening, the Senate released what is likely a last-chance deal to avert a closure. The 79-page bill would keep the government open until Nov. 17. It is designed to allow more time for negotiations over a broader spending deal that Congress must pass before the end of the year.

“While there is still a chance that Congress can reach a last-minute deal to extend funding past Sep. 30, there has been little progress made and there is little time left,” wrote Hatzius. “In the seemingly unlikely event Congress passes a short-term extension, we would still expect a shutdown sometime later in Q4.” READ MORE

“It’s Not Coming; It’s Already Here” -Daily Reckoning

The long and protracted War on Cash rages on; but those on the side of solely digital dollars are gaining a frightening amount of ground lately. 'Safety and convenience' is their battle cry, but at what cost? The loss of freedom, privacy and long-term wealth. It's a terrible tradeoff. This is why we recommend a position in gold. A real form of money that has stood the test of time.

by James Rickards

army man When I talk about the war on cash and a cashless society, some people think I’m exaggerating the threat or they don’t take it seriously.

But I’m not exaggerating the threat. It’s here, it’s growing and it’ll only get worse. Today I’ll show you the latest example.

The proponents of the cashless society cite convenience as a major benefit. Why bother having to tote a bunch of cumbersome cash and coins around when you can just swipe a card or pay with your smartphone?

Besides, they say, cash enables criminal activity on the black market. Cash is the money of crime. And in some respects, they’re right.

Swiping a card or scanning your smartphone is certainly easier than having to get cash from a bank or ATM and lugging it around in your wallet, dealing with change, etc.

If you eliminated cash and replaced it with digital money, it would impact the black market (though they’d figure out a workaround).

Meanwhile, cash is costlier to produce than digital money and unlike with cash, you don’t need to hire a Brinks truck to move digital money around. No more bank robberies! And all those truck drivers and security guards can now learn to code!

You get the point. And that’s why the war on cash has been so successful. Digital money is simply more convenient to use than cash.

And the surest way to lull someone into complacency is to offer a “convenience” that quickly becomes habit and impossible to do without. READ MORE

JPMorgan CEO Jamie Dimon Says This Is the Number One Risk Threatening Global Economy – And It’s Not Inflation - The Daily Hodl

Jamie Dimon is comparing the current American market sentiment to a sugar high and is concerned many are unprepared for what is on the horizon. He advises investors to batten down the hatches and prepare for some hardship ahead.

by Henry Kanapi

JPMorgan chief executive Jamie Dimon says that the global economy is facing a far greater risk than persistent inflation or high interest rates.

In a new interview on CNBC India, Dimon says that people should prepare for higher oil and gas prices as well as higher interest rates.

While Dimon is urging people and businesses to be ready for higher energy costs along with tight monetary policies, he highlights that his number one concern is the current geopolitical situation.

According to Dimon, the war in Ukraine is negatively impacting oil, gas and food prices. He also notes that it is “affecting all global relationships.”

“I think the geopolitical situation is the thing that most concerns me, and we don’t know the effect of that on the economy. Again, I think the humanitarian part – that’s far more important.

I think it’s very important for the future of the free democratic world. We may be at an inflection point for the free democratic world. That’s how seriously I take it…

We have dealt with inflation before, we have dealt with deficits before [and] we have dealt with recessions before. We haven’t really seen something like this pretty much since World War II … There is no playbook.” SEE MORE

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9.26.23 - The SEC is Snooping on All Your Trades

Gold last traded at $1,900 an ounce. Silver at $22.86 an ounce.

EDITOR'S NOTE: The War on Cash is fought on a variety of fronts but the end result is always a loss of liberty and privacy for us all. The SEC's sharing of the data on every market move we make is just the latest strategy. While the tracking should be alarming in and of itself, the threat of this information being open to hacking is of even greater concern. A centralized database to track every American investor is, without question, an unconstitutional data grab; but can it be stopped?

What’s in Your Portfolio? The SEC is Snooping on All Your Trades

portfolio The SEC is now tracking your stock trades by your Social Security Number. It shares the data with 3,000 outside agencies.

In 2012 the SEC approved a new rule requiring a Consolidated Audit Trail to Monitor and Analyze Trading Activity.

“A consolidated audit trail that accurately tracks orders throughout their lifecycle and identifies the broker-dealers handling them will provide us with an unprecedented ability to effectively oversee the markets we regulate,” said SEC Chairman Mary Schapiro.

The new rule becomes effective 60 days after its publication in the Federal Register. SROs are required to submit the NMS plan to the Commission within 270 days of the rule’s publication in the Federal Register. Once the Commission approves the NMS plan, the SROs are required to report the required data to the central repository within one year, and members of the SROs are required to report within two years. Certain small broker-dealers will have up to three years to report the data.

This ruling was in response to a 2010 flash crash and quietly sat for years. The SEC is now following through.

The scope of the Consolidated Audit Trail, or CAT, a regulation the SEC issued in 2016 but implemented only recently, is breathtaking and unprecedented. In the words of the SEC press release, the regulation instructs regulated financial institutions to identify “every order, cancellation, modification and trade execution for all exchange-listed equities and options across all U.S. markets.” READ MORE

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9.22.23 - Will a Gov't Shutdown trigger recession?

Gold last traded at $1,924 an ounce. Silver at $23.52 an ounce.

EDITOR'S NOTE: Here we go again, another looming government shutdown with heartbreaking outcomes if one side doesn't budge. I think most Americans see past the histrionic threats by now. The government will shut down, the dramatic media will move on to something else and life will continue ... as it always does. But could this shutdown be the one that causes some real damage? Time will tell.

Government Shutdown Could Push Unemployment To 4%, Triggering Recession Start Signal -ZeroHedge

by Tyler Durden

clock According to Bloomberg chief economist Anna Wong, online betting markets see a 69% chance of a federal government shutdown starting Oct. 1, when appropriations will lapse if lawmakers can’t agree on a funding bill (in reality, the odds of a shutdown are just about 100%, although after a few weeks all should go back to normal as it always does after people get bored with the theatrics).

According to Goldman, a government-wide shutdown would reduce quarterly annualized growth by around 0.2% for each week it lasted after accounting for modest private sector effects. Goldman's baseline is that a shutdown could last for 2-3 weeks (the Trump government shutdown, the longest in history, lasted 35 days, from Dec 22, 2018 to Jan 25, 2019).

Meanwhile, Bloomberg Economics estimates a month-long government shutdown could temporarily push up the unemployment rate in October, triggering a popular rule for identifying the start of a recession.

And while the hit to unemployment and GDP growth will reverse once the funding impasse is resolved, Bloomberg's baseline is for the shutdown to have a mild negative impact overall due to forgone economic activity and uncertainty.

Bloomberg also speculates that in an extreme tail event, the maximum hit to 4Q GDP would be a drag of 2.8% if the shutdown lasts for the entire quarter.

Considering that the current Bloomberg survey median sees just 0.4% GDP growth for 4Q, a shutdown that lasts all quarter would push 4Q growth deep into negative territory, something we first said on Tuesday. However, as noted above, past shutdowns have, on average, been much shorter. The eight government shutdowns since 1982 have lasted an average of two weeks. The longest one — in 2018 — lasted five weeks.

Assuming a two-week duration, the shutdown will knock 0.5% off annualized quarterly GDP growth while it’s ongoing, and raise the unemployment rate by 0.1% in October. The effects will mostly reverse within 4Q once the funding stalemate is resolved, but forgone economic activity and the uncertainty from the shock could produce a net drag of 0.1% on 4Q GDP.

In the scenario of a month-long shutdown — and assuming the unemployment rate remains at 3.8% in September — October’s unemployment rate could increase to 4.0%. That would meet the Sahm Rule threshold for identifying a recession. READ MORE

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