A growing number of people have begun to hear that the U.S. Federal Government is about to "run out of money" or shut down. Now this isn't like a person running out of money the issue is Congress has not passed a unified budget for the Federal Government meaning all of the Agencies and Departments whose funding is appropriated by Congress do not have their budget for Fiscal Year (FY) 2024. For some reason I honestly do not know the Federal Government's FY runs from October 1 to September 30 it is weird and honestly, I do not get it but that's just how it is for whatever reason.
Previously, the Federal Government has shut down due to not passing a budget with the most recent running from December 22, 2018, to January 25, 2019, a 35-day shutdown the longest in US history. When this occurs essential services like the TSA, border patrol, ICE, health and human services, and Congressional staff deemed essential, etc. . continue to operate going to work and performing their duties. If a pay period ends during this time though they do not get paid and it comes out of pocket for these workers and they will be paid back pay once the appropriations bills are finally passed and go into effect. Others who are not deemed essential like National Parks workers are furloughed meaning they are subject to unpaid time off however these people also will get back pay once the appropriations bills are passed to make people whole again.
Unlike other times when there was a pretty strong feeling that the government could pull it off or pass a stop-gap funding bill this time Members of the Freedom Caucus have severely hampered the idea. They have made demands that just flat out won't pass either the House or the Senate and if they somehow did the legislation would be vetoed by President Biden. Right now the general thinking is that the government could be shut down for 2-3 weeks which is a significant amount of time but honestly no one really knows. As a result of the massive amount of unknowns about the Federal Government, the stock market and the U.S. economy are gearing up to brace for the impact.
Here is where crypto has a possibility to shine in a dark hour for the U.S. economy. We have recently seen the USD strengthen significantly even with all the talks of de-dollarization with 8 straight weeks of strengthening compared to the rest of the world something that has not occurred since 2014 and the Chinese Yuan hitting its lowest levels since 2007. When previous government shutdowns have occurred or the Treasury has come close to default the big three credit agencies in the world have threatened and twice have lowered the U.S. credit rating. This rating is vital for the US and its issuance of Treasuries and keeping its status as the world's reserve currency.
Since the world's economy is currently struggling with Europe, South America, China, and others dealing with various economic issues it's unlikely others will be able to take advantage of this. What could though is the assets that do not have governments and the issues affecting them... Crypto. This is one of those rare moments where a bunch of different things align that could really boost crypto prices as people get rocked with uncertainty and move into areas that are not dependent on the government. How long this would last and if it would be a significant boost as we have previously seen remains to be seen as people continue to grapple with inflation along with other issues.
Since I work in Congress this is a bit of a challenging time due to the idea of my paycheck stopping and the chaos of people not being 100% sure what is going on. Personally, I do wish we would come to a funding agreement because otherwise, my paychecks stop and I will be one of those who will still need to go to work. No matter what in the coming days and weeks ahead I will be sure to keep yall updated on the status of government funding since if the government fails to crypto could really stand to benefit and even if they do an 11th-hour funding bill I could still see a positive bump for crypto still.
originally posted on r/cryptocurrency
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