Sunday, January 21, 2018

How to Play the Shutdown

The US government is supposedly shutting down. A bunch of bureaucrats are having to take a few days off. This isn't going to be the end of the world, of course, but punters like to present it this way.

The dollar will likely fall as a consequence of this. Interest rates will spike further, and stock markets will tank.

With almost all markets in bubble territory, this may be the trigger for a downward correction.

If so, the incumbents in Washington will have the perfect excuse. They can point to the opposition and blame them for whatever happens in the markets during the shutdown.

If the incumbents have any sense at all, they should make the most of this opportunity. They should use language designed to create fear in the markets. If they manage to trigger a fall, they should do their utmost to prolong the government shutdown.

This way, they may be able to blame the entire mess on the opposition, just in time for the mid-term ellections.

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