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Debt Ceiling — Like a drug dealer who you owe a lot of money, people are gonna be very upset if the United States defaults on its obligations. As the expiration for the current U.S debt limit level approaches (Friday at 12:01am), investors, traders, and civilians are having trouble falling asleep, commencing a flight to safer assets. A temporary government shutdown is all but guaranteed if Congress is unable to extend the deadline or raise the debt limit. The real trouble, however, comes in the weeks following.
Treasury Secretary Janet Yellen has estimated that if the ceiling is not lifted, the U.S government will default on its payments on October 18th. As treasuries are seen as “risk-free” and much of the world relies on U.S, defaulting on interest payments would be the exact opposite of good. Now, Senators are working towards a resolution that could already be in place by the time this hits your inbox, so we’ll find out how this plays out soon. Does blockchain fix this?
U.S. Dollar — The greenback is back and ready to party. The value of the U.S dollar against a basket of other meaningful currencies, such as the Euro and Swiss Franc, reached its highest level in almost a year on Wednesday. The US Dollar Index, known as DXY, reached as high as 94.432, as demand amongst traders and investors for safe-haven assets grows amid major global economic concerns. Despite how it sounds, a stronger dollar isn’t necessarily tied to a strengthening economy. Deleveraging plays a role and the dollar’s status as a global reserve currency puts it in position as a reliable safe-haven during tumultuous economic periods. But hey, for what it’s worth, those $1’s in your wallet can buy more of other currencies now than it could a year ago.
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