Editor's Note: Just about everything in this post relates to information gleaned from the video at the end. It is the intent of Money Daily to present information that is honest and truthful. Because of the complexities of the background information, some of what is presented in context may or may not be entirely correct, but, it is intended to supply an explanation of the current conditions as accurately as possible. Readers should be advised, as always, to do their own due diligence.
Well, everything in The United States of America Unincorporated appears to be just going swimmingly, and, that's because the "government shutdown" pertains to only the United States Incorporated Municipal Government based in Washington, D.C.
Pay attention to the names and capitalization of the "t" or "T" in "the" or "The" because it's important. See the video below for (some) clarification. It's indeed confusing.
In any case, the federal government, which is "the United States Incorporated Municipal Government" is what's supposedly shut down. If that is the case, the actual The United States - composed of the 50 individual sovereign states should be in charge of the affairs of the country. Being that the states themselves have become, quite literally and incorrectly, vassals of the federal government, the situation has become quite dicey and explains why President Trump was able to withold $18 billion in infrastructure funds from New York along with millions in counterterrorism funding for New York City.
If the "government" is shut down, how is it that Trump can do this? Simply, the United States Incorporated Municipal Government Shutdown, aka the federal government, isn't actually shut down, it is just operating with limited funds. Trump's withholding of funds to states, non-payment of essential workers and furloughs of roughly 750,000 non-essential employees are within his bailiwick. The president must do what he can to preserve funds in order to pay current bills, so, expect more of this kind of activity the longer the shutdown lasts.
If the government cannot find a way to resolve itself, it will indeed become bankrupt and will default on all kinds of contractual obligations like paying interest on loans, which is probably at the very root of this operation. As far as can be told, if the federal government, as it is currently constituted, defaults on obligations, the federal government, unable to function as an ongoing entity, will cease to exist, and then, and only then, will The United States of America Unincorporated be able to rightfully return to operation of the country under business entities known as the States of America Unincorporated Confederation and the United States Unincorporated Federal Republic, which have not bene functional since the Civil War.
If, at this point, you're confused, that's entirely understandable. The video below explains much of this, but, it's only a starting point. Money Daily is committed to educating itself and its readers, though the process in this time of crisis - and, despite outward appearances, this is a crisis, a constitutional crisis, though which one, of the three that exist, is uncertain - is bound to be laborious and sometimes veer off into unknown territories of knowledge.
Whatever the case, this is the understanding of what's currently underway, and, it may actually have a positive end game. The shutdown was seemingly engineered by the Senate. By failing to approve the bill forwarded by the House, lacking the 60 votes need to overcome a filibuster, they set the stage for the government to operate without funding, curtailing the ability to appropriate funds to the various agencies. While the government can operate only on funds currently in the coffers of the U.S. Treasury, borrowing, via auctions of treasury bills, notes, or bonds, would be a moot point until funding is approved. The money may be there, but it cannot be dispensed.
It's like a father holding his son's allowance until he finishes mowing the lawn and taking out the trash. The money's there. It's just not going to be doled out (appropriated).
The long game in this shutdown drama (we hope) is for the government to eventually default, or, at least, judging by the actions of the president, Senate, and the House, that's the impression. The government is purposely destroying itself, or, as the case may be, the part of it that has usurped power since the Civil War.
Bear in mind that President Trump is trying to withhold funds from states as much as he can, in effect, saving what's already been approved by congress from being spent. He will need that money to operate those parts of the government that he chooses to keep functioning. Additionally, nothing is going to happen until both houses of congress are back in session, because they need, at some point, to work out an funding package, or, at least that's the optics at present. Whether that is the master plan - to default - is not presently discernible, but, since neither house will be in session until Monday, October 6, when the Senate returns, the shutdown will last at least through this weekend. On Tuesday, October 7, the House reconvenes and will be in session, along with the Senate until Friday, October 10, according to Roll Call's handy congressional calendar [PDF].
In the meantime, life goes on in the markets with or without government interference. The usual first Friday of the month Non-farm Payroll numbers will not be available today, since the BLS is one of the agencies not currently operational. It's probably good timing, since the report for September, despite having its usual unreliable data, was likely to be somewhat distressing, showing the country actually losing jobs rather than creating them. For what it's worth, investors will have to fall back to the ADP monthly employment report, issued on Wednesday, for guidance concerning the current employment picture.
ADP's September report was less-than-encouraging, showing a loss of 32,000 jobs in the private sector. Additionally, ADP conducted a preliminary re-benchmarking of the National Employment Report based on full-year 2024 results from the Quarterly Census of Employment and Wages (QCEW) released by the Bureau of Labor Statistics (BLS), resulting in a reduction of 43,000 jobs in the September report while revising August 2025 from 54,000 to -3,000. Just like that, 97,000 jobs went "poof."
Wall Street, whistling past the grave as it always does, completely ignored the implications of a shrinking labor force and powered to record highs again on Thursday, focusing on the AI hype machine to keep stocks floating. It's worth pointing out that while AI promises all manner of improvements to human existence, little has been achieved other than big tech companies like Google, Microsoft, Apple, et. al., promising to spend $$ billions on infrastructure including massive server farms and power generating facilities. Implementation of AI as the entry point to search engines, particularly Bing and Google, have served only to privide dodgy information and anger a horde of webmasters who feel they are not being compensated for information they've provided.
Stocks have performed admirably in the face of the government shutdown. Through Thursday's close, the Dow is up 272 points, NASDAQ ahead by 360, and the S&P up 71. The S&P set another record high close on Thursday, sending the Shiller PE (CAPE) to 40.08, the second-highest level on record.
Other than being hammered down on the COMEX twice this week, first, on Tuesday overnight and again, savagely, on Thursday during New York hours, gold and silver also advanced nicely through the carnage. An hour before the opening bell for stocks, gold is $3,885 and silver, $47.48 per ounce. Price gains in precious metals recently have been satisfactory, but may be presaging the kind of wild swings that will happen when currencies begin failing, which could be soon, as in months, not years, though those kinds of events are usually delayed by major wars, which the world - at least from a Western perspective - seems hellbent towards.
Bitcoin received quite a boost through the week of the shutdown, adding about $8,000 to quote over $120,000, the highest in six weeks. Similar to the AI chorus of cheerleading, bitcoin proponents continue to harp on about how the vaporware that is crypto is undervalued, some suggesting bitcoin's true price should be upwards of $200,000 or $1 million. These dreamers may actually be proven right in the case of a government default.
WTI crude oil is having a rough week, with the price per barrel looking to fall below $60, a weekly decline of about 10 percent. The combination of an enormous supply glut, slack or declining demand, and higher production quotas for OPEC are beginning to be realized. WTI at $50-55 or lower looks to be dead ahead.
With all of the current confusion, headwinds and tailwinds, stock futures are set up for a positive, though sliding toward unchanged, open. Dow futures: +62; NASDAQ futures: +14, S&P futures: +4.
OK, ready to get really confused about what's really going on in the country known as The United States of America? Watch...
At the Close, Thursday, October 2, 2025:
Dow: 46,519.72, +78.62 (+0.17%)
NASDAQ: 22,844.05, +88.89 (+0.39%)
S&P 500: 6,715.35, +4.15 (+0.06%)
NYSE Composite: 21,607.97, -32.03 (-0.15%)
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