The specter of the second government shutdown

Markets are preparing for a scenario of a second collapse by February 14. Bets indicate a 71% chance of a new U.S. government shutdown after the Department of Homeland Security funding bill stalled due to severe political disagreements following the ‎#Minneapolis incident. History repeats itself and the risk of a repeat of the January massacre is very close.

Why is the story "disaster" not just politics?

We still haven't had a chance to heal our wounds from the closure (January 31 - February 4) that disrupted the financial markets in just 5 days, and now we are back to the same cycle.

The painful memory: in the last closure, gold lost about 800 dollars and Bitcoin dropped 5000 dollars in the blink of an eye. This confirms that the market "hates" something called political ambiguity.

The weapon of "internal security": the disagreement now is not about the numbers; the story has become "political stubbornness" after the shooting incident in Minneapolis. When the budget is stalled during the "shutdown hour," the countdown begins, and today we are on February 12, which means only two days left!

The "pulse" of the economy has stopped: the shutdown means delayed salaries, delayed contracts, and more importantly, "delayed data." When an investor loses visibility, the first move they make is to "flee" to cash, and that leads to a crash.

A "killer" timing: As we mentioned a little while ago, this news came in conjunction with the "liquidity drain" from the U.S. Treasury, which means the market is taking two hits: liquidity shortage + government shutdown.

The most important thing you need to understand, my trading friend,

"The market is sinking, and the wave is rising." The 71% rate indicates that the "blow" is almost certain. The shutdown is not just about employees sitting at home; the shutdown is a "sudden brake" on the American economy. If the shutdown happens tomorrow or the day after, prepare for a "black Valentine's Day" in the markets, and gold and #crypto will be the first victims.