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The government shutdown looms for this coming Tuesday while Republicans and Democrats fight over “policy.”  The odds of a shutdown have risen sharply as defunding or delaying Obamacare has become a focal point by the Republicans.  To add to the shutdown odds is our president saying that he “will not negotiate” on Obamacare and will not sign any such legislation.  This is a true mess but not necessarily for the reasons we hear publicly.

Congress is going to have to “put a number” on any debt ceiling increase and people will get to see it.  Please keep in mind that any “number” that is chosen will have $300+ billion used up on day one as this money has already been pilfered and spent as “extraordinary measures” to keep the government open.  This is a little spoken of problem, how does Congress raise the debt ceiling enough to last more than a year or 18 months without the number being a shocker?  Another aspect is that President Obama has made statements like “we are not a banana republic” and “we must protect our full faith and credit as we are not deadbeats.”  While this may play well for sound bite MSM, any thinking person understands what he is really saying.  “We can’t pay our bills unless we can borrow more to do it”…this does sound like something your typical deadbeat banana republic would say doesn’t it?

There has also been talk of President Obama raising the debt ceiling by executive order. Would he really do this?  Can he?  If he did, what ramifications would that have for our so pristine “full faith and credit?”  One would then ask (if they haven’t already) where would it all end?  I am sure that many people would just sit back and say, “Phew, that was close…we almost went bankrupt” but, this strategy if chosen will be the final nail in our fiscal coffin.  In fact, as social unrest will eventually and inevitably arrive it will be the open door to a dictatorship but I guess I’m getting ahead of myself.

None of this and no “deal” can or will change the fact that we already are broke and THE model of a banana republic.  The entire world knows this and explains why demand for gold has exploded over the last 12 months AND why sovereign nations have lined up requesting their gold to be delivered with the latest being Finland.  I have so far assumed as I believe most people have that a deal will get done…what if it doesn’t?

If there were no raise of the debt ceiling  and the government “ACTUALLY”  did shut down for even a week, can you imagine the repercussions? No social security checks, cash to states to fund EBT cards not sent, veterans payments, TSA, military contractors etc. stuck in the mud.  My point is this, so many people (and programs) live check to check today and the system is more fragile than ever before.  You must also ask the question of what happens to banks, insurance companies and the derivatives chain if Treasury payments are not sent on Oct. 1?  This is a legitimate question and one that might have some surprising answers with a week or more of no lubricant to the engine.  Can we go a week or more with a shutdown?  Can the system even be restarted after a week or more?  Maybe, maybe not.

I say “maybe not” because our bankruptcy has been hidden and shrouded for so long that only a very few recognize how dependent everything has become on “Washington.” I can’t imagine the fear or better said the “realization” that an actual shutdown will bring forth.  100 years ago the government could have shut down (well not really because we were not broke then) and few if any would have noticed it.  We had no social programs whatsoever back then, the crops grew, people worked and neighbors helped neighbors.  Now, so many different aspects of our lives rely on a government that functions that we don’t really realize it.  A government shutdown of a week or more could actually in a perverse way be a good thing in the long run.  Unfortunately whether it is now or at some future date, paying the piper will be one painful and scary event.