Negotiations broke, the US two parties negotiations unsuccessfully each other "drop the pot", the U.S. government is only one step away from the shutdown, from the historical point of view, the political storm caused by the government shutdown, for the U.S. economy and the market, has always been irrelevant events, but this time may be different.

Gold price broke $3,800, the biggest seller of U.S. bonds appeared and sold $1.6 trillion, a ¡°predictable but unavoidable¡± self-harm is taking place.

Trump's White House talks failed

With less than two days left in the countdown to the shutdown of the U.S. federal government, the key negotiations between the two parties on funding ended in failure again. According to agency forecast data, the probability of a partial shutdown of the U.S. government on October 1st has climbed to 70%.

Specifically, on Monday, Trump convened an emergency meeting of congressional two-party leaders at the White House to break the current political impasse.

However, the two sides have not reached a consensus on the core issues: Democrats insist on the inclusion of provisions such as extending medical subsidies and cancelling cuts on medical subsidy schemes in the short-term allocation bill, while Republicans explicitly refuse to add any policy content to the provisional spending bill.

The Republican position is very clear, said to eliminate cuts and reduce costs, while the Democratic Party sets its terms as the "uncompromising bottom line", at present, the contradiction between the two sides is sharp, especially the political mutual trust of the two parties has fallen to the bottom, and the Democratic Party stressed that the promise of "first through, after negotiation" has no credibility.

The two parties disagreeed, and Wans pushed the pot to the Democrats, accusing the Democrats of not doing the right thing, leading the U.S. government to go to a halt.

This would be a double blow to the U.S. economy and livelihoods.

Market expectations for the September non-farm in the U.S. may be delayed with government shutdowns, and millions of U.S. low-income households relying on food bonds, housing subsidies and energy aid may face funding shortages.

What¡¯s more special is that the U.S. labor market was shaking, and now Trump¡¯s authorities are also instructing federal agencies to prepare for ¡°massive permanent cuts.¡±

In the face of this situation, the feelings of refuge have warmed, and the price of gold has reached a new high, according to the data showing that the price of gold has increased by 45% since this year, and its driving force has long exceeded the mere short-term refuge.

The biggest seller of U.S. bonds appears

Behind this are the high scale of government debt, the persistence of inflation, and the international community's doubts about the status of the US dollar as the world's primary reserve currency, which constitute the core driving factors for the long-term rise in gold prices. Today, the U.S. government is facing the imminent risk of shutdown, which acts as the direct fuse to trigger a new round of gold price rise.

According to the evaluation results of the U.S. Congressional Budget Office, during Trump's first term, the U.S. federal government experienced a 35-day shutdown. This shutdown was the longest government shutdown in American history, directly causing about 11 billion dollars in economic losses.

About 800,000 federal employees are forced to continue working without pay or encounter forced leave. A quarter of federal government departments, including the Department of Homeland Security, the Department of Transportation, the Department of the Interior, the Department of Agriculture, the State Council and the Department of Justice, have suspended normal operations, resulting in the closure of national parks, the delay of passport processing, and the reduction of the frequency of food safety inspections, which has had a wide and significant impact on people's daily life.

Now the real cost of this "political game" will eventually be shared by Americans and the global economy.

Up to now, U.S. Treasury bonds have exceeded 37 trillion U.S. dollars, of which more than 70% are held within the United States.

However, according to the capital flow of U.S. debt, it is neither China nor Japan, nor the United Kingdom but the Federal Reserve that has sold the most U.S. debt. From 5.8 trillion U.S. dollars in 2022 to 4.2 trillion U.S. dollars today, in just over three years, The Federal Reserve reduced its holdings by $1.6 trillion.

You must know that since the Federal Reserve announced an interest rate hike, it has begun to shrink its balance sheet, and shrinking its balance sheet is to recover the U.S. dollar flowing in the market by reducing its holdings of U.S. debt, so as to achieve the purpose of controlling inflation. However, it is worth noting that since September last year, The Federal Reserve started cutting interest rates, and in September this year, but the Fed's balance sheet shrinkage continued.

Behind this contradiction, is it actually reflecting the Federal Reserve is at a difficult crossroads, stable employment or controlling inflation?

Dramatically, Trump, one of the culprits of inflation, doesn¡¯t care, and his Department of Homeland Security even says directly that tariffs can¡¯t stop even if the government stops.

German media directly said that if Trump continued to govern this way, the U.S. dominance would end faster than the world expected. #MCN Double Progress Plan #

Source: "The two parties' negotiations are unsuccessful" and "Wans: the U.S. government is heading towards a halt" observer network