US government shutdown and impact on investments

One of the biggest stories I’m watching is (another) US government shutdown. The media seems completely quiet, brushing it off as a non-event. But I think it needs more attention than it’s getting.

Shutdowns in the US are nothing new, they happen regularly. There have been around 21 funding dispute shutdowns since the modern budget concept was introduced. The longest shutdown was 35 days during the previous Trump administration in 2018.

After each shutdown, the party resumes with more debt, more money printing and more of the same. So while everybody is expecting this time to be the same, I think we could be in for a surprise.

This shutdown could last longer than expected and bring with it a wave of concern, especially with stocks are record high valuations. Here is my quick audio note on the topic.

If a US shutdown does turn into something more problematic, you can rest assured that the US Fed will be encouraged to cut rates faster than expected and that will change the trajectory for the RBA too.

Gold, silver, stocks, crypto and real estate are all rising strongly because the trust in government, regardless of country, continues to diminish.