Inflection Point: US Government Shutdown and Strange Economic Signals

This article was written by Brandon Smith and originally published at Birch Gold Group

The US economy has been experiencing what I would call a form of “stasis” for the last year; it’s floating in the deep ocean, waiting for a catalyst. Either it finds dry land soon, or another anchor is added and it sinks into the abyss.

In my article “Trump’s Return: Get Ready For Chaos To Be Unleashed And Blamed On You”, published in July of 2024, I predicted that Biden would step out of the presidential race and that Trump would win the election. I noted that:

“It was perhaps one of the biggest blunders the globalists have ever faced. The WEF’s Klaus Schwab, Dr. Evil himself, has faded into the background and retired as executive chairman. The big play for medical tyranny bombed. Now what to do?

Is it a mistake that the establishment has continued to stick with Biden despite his delirium? Or, did they send Biden into that first debate knowing exactly how bad it was going to go? Is this a ploy designed to complete the Herbert Hoover scenario?

This year, Trump hinted in an interview with Fox Business that he “does not want to become the next Herbert Hoover” inheriting a time bomb economy from Biden. Biden argued in response that Trump was ALREADY like Herbert Hoover because of the jobs lost during covid.

This is, of course, a false claim. But the narrative is everywhere: “Trump will oversee a crash in America similar to 1929…”

There were two ways to interpret the election outcome:

1. The globalists put all their eggs in the Biden basket (and the covid basket) and made a detrimental error. Leaving the White House open to be taken by conservatives even with possible election manipulation.
2. The globalists accept that they failed to turn the pandemic into the permanent medical tyranny they wanted, but they’ve moved on to Plan B. They are now setting up conservatives and populists to take the fall for an economic crisis they have been brewing in the background for years.

When it comes to the second scenario, it’s important to understand that it is impossible to reform the current economic system without triggering a rapidly escalating crisis. Libertarians have been chanting the motto “End The Fed” for decades, but I don’t think many of them grasp what this would actually entail. Any change in the status of the Federal Reserve means financial chaos.

The globalist system is set up to self destruct if it is tampered with. This is an unavoidable fact.

We are already seeing the consequences of this with Trump’s closing of USAID and his implementation of tariffs. The effects are not as visible in America, but around the globe the throttling of US funding to foreign markets is causing a panic. It’s astonishing to see just how dependent the rest of the world has been on US taxpayer dollars and the steady fiat created by the Federal Reserve.

Europe, for example, is scrambling to fill their security void with proclamations of increased military spending. Europeans often criticize Americans for not supporting socialist welfare programs like universal healthcare. What they don’t mention (or are too ignorant to realize) is that THEIR socialist programs have been entirely dependent on US defense spending.

We make NATO possible with hundreds of billions of dollars in military support so that Europeans can have their free healthcare while they sneer at us. Canadian officials across the border have admitted that if they increase their NATO spending to just 2% of GDP as they are supposed to do, their social welfare programs might take a hit.

This is only one example of the kind of instability that occurs when the US stops paying for the rest of the planet. We have seen numerous third world governments show up (like South Africa), demanding continued handouts from the US. They don’t ask, they EXPECT. They have been enjoying our money for so long they now feel entitled to it. That is the globalist system we are currently living in.

So, you can imagine what might happen if all that America cash is cut off at the source due to a government shutdown. Generally, a government shutdown affects foreign aid by halting new obligations and disbursements of funds .

While some aid can continue, the impact depends on several factors, including the type of program, existing contracts, and the administration’s policies. We have no idea at this stage how long the shutdown will last, but foreign governments and outside contracts must be sweating bullets. Trump has even argued that he can use the shutdown to cut programs and make changes he would not be able to accomplish otherwise (Senate Republicans have already confirmed over 100 Trump nominees while the Dems are throwing their shutdown tantrum).

This isn’t a terrible idea. In fact, I applaud him for it. Most of Trump’s policies are exactly what we need to reverse our disastrous course, but is it too late?

I have to acknowledge the fact that the system won’t tolerate reform without negative feedback. Loss of dollar circulation is going to put pressure on foreign banks to look for alternatives. I’m not talking about a BRICS currency because the BRICS aren’t capable of replacing the dollar. What I’m talking about is globalist institutions like the IMF and BIS which have both been quietly working on a digital (CBDC) dollar alternative for a number of years.

Meanwhile, the dollars that don’t spread out overseas will come back to the US, and we are already experiencing persistent stagflationary conditions. Price increases have slowed since Biden was in office, but we certainly haven’t seen costs in necessities go down much.

I would point out that the housing market (a canary in the coal mine) has been dealing with a rapid decrease in sales since the pandemic. Yet, the insane prices refuse to decline to meet the falling market demand. We are also seeing this in groceries, gas prices, electricity, auto prices, etc. Demand is plunging, but prices will not adjust. Retail sales remain high, but only because Americans are spending a lot more money for a lot less stuff.

Gold and silver are also trying to tell us something. Despite growing stagnation, metals are skyrocketing in price. Silver prices have exploded by 50% since last year. Gold is over $4000 an ounce.

This is good news for those of us holding onto PMs, but it is also a signal that inflation is not going anywhere. One could argue that metals are merely catching up to where they should be in the face of suppression by banks, but I don’t think this explains it.

More likely, dollars are coming home to roost in the US and this is going to keep prices high even in the face of a deflationary event (recession). That’s not good in the short term. Like I said, globalism is designed to punish anyone that tampers with it.

And then there’s the central bank. Concerns are rising in the mainstream that Trump may use recent events as a means to “reimagine” the Federal Reserve, thus ending its much touted “independence”. The Fed is, of course, not independent – It answers to international banks, as noted by globalist insider Carroll Quigley in his book “Tragedy And Hope”. This is the structure that was put in place over a century ago to help finance the globalist edifice through fiat.

By interfering with the Fed, economic blowback is assured.

This is not to say that nothing should be done; the entire globalist empire must be erased eventually. But it’s naive to think that we can do it without a historic crisis. Even basic government spending cuts will trigger instability – Upending the Fed would be a disaster. And guess who gets the blame for that disaster? You, me, and anyone who backed the populist movement.

So be ready for the international ire and be ready to fight, because they’re going to try to crucify us when the anti-conservative and anti-nationalist narrative drops. I have always said that Democrats would never allow a shutdown on their watch. They would only ever support a shutdown while conservatives are in power.

But maybe the shutdown will end quickly. The debate largely depends on the Democrat Party’s insistence that illegal immigrants in the US under pretenses of asylum are “documented”. This means they get access to ACA coverage (free healthcare). This is an indefensible position and they won’t be able to exploit it for long.

That said, the political left has proven over and over again that they want the country to burn, and if they can do it while Republicans take the blame, all the better. I worry that a budget agreement is not meant to happen and that a crisis is meant to fester. Is this the “inflection point” many of us in the alternative economic media have been expecting?

If so, then it is happening sooner that I thought it would. I figured we would have at least two years of Trump’s second term before the other shoe dropped. But the speed at which leftist groups and the globalists are accelerating their political violence suggests an economic reckoning is around the corner. Every major crash event in history tends to coincide with civil unrest and war, and the pattern appears to be repeating.

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