Latest / The Paul Barron Crypto Show / Government Shutdown Panic vs Crypto🔥Market Update

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Government Shutdown Panic vs Crypto🔥Market Update · The Paul Barron Crypto Show

0:07
Speaker 1: The government shutdown is looming. Could it crash crypto today?
0:10
Speaker 1: We're going to break it down for you. My name
0:12
Speaker 1: is Paul Barren. Welcome back into tech Path. I do
0:13
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0:40
Speaker 1: let's go over to a few points here. I want
0:42
Speaker 1: to kind of lead off with the kobeec letter here
0:44
Speaker 1: breaking President Trump says you'll place a two hundred percent tariff.
0:47
Speaker 1: This happened this morning on all wines, champagnes and alcoholic
0:51
Speaker 1: products coming from the EU. If they do not cancel,
0:55
Speaker 1: they're fifty percent tariff on US whiskey. I think he's
0:59
Speaker 1: really just vuying here for a reciprocal tariff. Maybe they
1:03
Speaker 1: drop a little. Maybe Trump only comes up to twenty,
1:07
Speaker 1: maybe they drop down to or maybe they just reciprocate
1:09
Speaker 1: and go fifty to fifty each side and everybody wins
1:11
Speaker 1: and everybody's happy. We'll see if this is going to
1:14
Speaker 1: be a continuation, because the problem that we're seeing in
1:17
Speaker 1: the markets right now is every time Trump does this,
1:20
Speaker 1: it hits the markets. It's almost immediate, and the pain,
1:24
Speaker 1: though it may be short. I think everybody now is
1:27
Speaker 1: trading tariffs, and once in truugh Trump does this, we
1:31
Speaker 1: get a tariff move and yep, that's what happens. Yesterday,
1:34
Speaker 1: of course we saw that steal in aluminum Canada could
1:37
Speaker 1: rise to fifty percent Canada and Mexico twenty five percent.
1:40
Speaker 1: Some Mexico tariff paused until April second win, which is
1:43
Speaker 1: when he's going to launch all the reciprocal tariffs. China
1:46
Speaker 1: extra twenty percent on top of the ten. So they're
1:49
Speaker 1: getting railed and then I shouldn't say real, they're getting
1:53
Speaker 1: the tariffs they charge us, and then Europe the potential
1:56
Speaker 1: two hundred percent on alcohol. That's what's happening right now,
1:58
Speaker 1: and of course the market is down definitely responding to it.
2:01
Speaker 1: As we see bitcoing around eighty K. I want to
2:04
Speaker 1: go to a clip real quick. This will get a
2:05
Speaker 1: little bit more into the detail of what they're thinking.
2:08
Speaker 2: Take a look one or two items with one trading block.
2:14
Speaker 2: I'm not sure why that's a big deal for the markets.
2:18
Speaker 3: I think that the big deal for the market is
2:20
Speaker 3: just the not knowing what's next and what the target
2:23
Speaker 3: is necessarily going to be, and also not knowing where
2:26
Speaker 3: this stops. Because if we ratchet up tariff, they retaliate,
2:31
Speaker 3: we go higher than.
2:32
Speaker 2: What Well, look sir, it could go the other way too. Look,
2:37
Speaker 2: that's the nature of these reciprocal tariffs that all President
2:41
Speaker 2: Trump is asking is for countries to take theirs off.
2:46
Speaker 2: So we have identified some strategic industries the steel, aluminum,
2:52
Speaker 2: likely autos, but everything else is up for grabs, and
2:57
Speaker 2: that's going to be a decision that's made by our
2:59
Speaker 2: trade partners.
3:03
Speaker 3: Yeah, that was one of my questions, which is how
3:05
Speaker 3: these tariffs come off, if that is ultimately the goal,
3:09
Speaker 3: because it feels like once they go on, it just
3:12
Speaker 3: gets out of control from there.
3:14
Speaker 2: Well, again, that's that's a decision by our trading partners.
3:19
Speaker 2: They if they want to ratchet things up and I
3:22
Speaker 2: could tell you somebody who's studied the history of this,
3:25
Speaker 2: it is the surplus country that takes the greatest hit.
3:29
Speaker 2: We we have a big trade deficit with these countries.
3:33
Speaker 2: So in the event that there's a back and forth
3:37
Speaker 2: with tariffs, I would counsel these government leaders that they
3:40
Speaker 2: are on the losing side of this argument economically.
3:44
Speaker 1: Yeah, okay, so there's a lot there. I think the
3:46
Speaker 1: key here, first of all, is you know, Trump is
3:49
Speaker 1: playing the strong arm card here in art of the deal.
3:52
Speaker 1: It is a it is a technical process of negotiation
3:57
Speaker 1: that he's going at now whether or not this rolls
3:59
Speaker 1: out into equal tariffs, reciprocal tariffs across a lot of
4:03
Speaker 1: these countries. First of all, if that were to happen,
4:05
Speaker 1: it would be amazing for all American manufacturers if we
4:10
Speaker 1: actually got reciprocal tariffs in most of our goods. I
4:12
Speaker 1: can imagine the bourbon industry, in the whiskey industry would
4:15
Speaker 1: absolutely go crazy if Kentucky were able to do that. Now,
4:19
Speaker 1: the other side of it, like the reporter said, is
4:22
Speaker 1: what happens if they go higher and best, and of
4:25
Speaker 1: course responded, is that the country who does have the
4:29
Speaker 1: excess side of it is typically the one that loses,
4:33
Speaker 1: and that's the problem right now, because they don't have
4:35
Speaker 1: as many cards at the table. I think he's going
4:38
Speaker 1: to hold it and he's going to win on a
4:40
Speaker 1: lot of these negotiations. It's already shown that it has happened.
4:43
Speaker 1: With that being the case, it is hitting the dollar.
4:46
Speaker 1: Many are right now sleeping on the DXY. This is
4:49
Speaker 1: a dump that's been happening. We've been talking about for
4:51
Speaker 1: quite some time. There's a few things that are in there,
4:54
Speaker 1: because this is where it changes a little bit. When
4:56
Speaker 1: the dollar is strong, capital flows into the US training
4:58
Speaker 1: liquidity from everywhere else. Right, Okay, but now we're seeing
5:02
Speaker 1: the opposite because Germany is going full send on their
5:05
Speaker 1: infrastructure fund. Basically, this is Germany now printing. The EU
5:08
Speaker 1: is likely to go ahead and start printing as well.
5:11
Speaker 1: There's going to get liquidity into these The question is
5:14
Speaker 1: is which has the stronger economy to support that liquidity.
5:18
Speaker 1: Now it could flow into the economies themselves, or that
5:22
Speaker 1: liquidity will by default go into the strongest economy that
5:26
Speaker 1: has the most liquid consumers in the world. There's only one,
5:31
Speaker 1: and that's the United States. So I think that's a
5:33
Speaker 1: little different in terms of how the q is going
5:36
Speaker 1: to play out in Europe. The market isn't fully pricing
5:40
Speaker 1: this end. But in this opinion, this does expect risk
5:43
Speaker 1: assets including crypto to go up, and I think that
5:46
Speaker 1: will be the case, which has mostly been the scenario
5:48
Speaker 1: right now. I think it's thwarted because of what we're
5:52
Speaker 1: seeing coming out of the White House, which has mostly
5:54
Speaker 1: been affecting the markets due through the use of tariffs.
5:59
Speaker 1: Egg price is though, so now have hit a three
6:01
Speaker 1: month low, so we are seeing some adjustments here. Interestingly enough,
6:07
Speaker 1: could the slowing of the CPI because Trump is now
6:10
Speaker 1: claiming that's his first CPI print, that everything before that
6:14
Speaker 1: was coming in from the Biden administration. Are we seeing
6:17
Speaker 1: a slowing of the consumer price index and inflation going forward?
6:22
Speaker 1: Bitcoin price dropped two percent also as falling inflation boosts
6:27
Speaker 1: US trade war fears. Normally falling inflation would stimulate the market.
6:31
Speaker 1: That has not necessarily been the case because tariffs are
6:34
Speaker 1: sucking the air out of the market right now. Polymarket
6:38
Speaker 1: has a couple of things. Let me kind of zoom
6:40
Speaker 1: in on this for you guys a little bit, so
6:42
Speaker 1: you'll see a little bit here, all right, So this
6:43
Speaker 1: is the likelihood of a rate cut here in March
6:46
Speaker 1: pretty much not going to happen. It's going to be
6:48
Speaker 1: one hundred percent. We're not going to see a rate
6:50
Speaker 1: cut this month, which means not a rate increase either.
6:54
Speaker 1: But I think we will see some indicators. So when
6:56
Speaker 1: we do that livestream on March nineteenth week, stick around
7:01
Speaker 1: for that one, because I think there will be a
7:03
Speaker 1: big significance to this May seventh date. This is the
7:06
Speaker 1: one that is really up for grabs right now. As
7:09
Speaker 1: you can see here, it's lending and trending to the
7:12
Speaker 1: upside of a rate cut. But June eighteenth is when
7:16
Speaker 1: it goes absolutely fulsin too a rate cut. So May
7:19
Speaker 1: and June big months. I remember May. We've seen May
7:23
Speaker 1: before become a very critical date in past cycles. Even
7:28
Speaker 1: though I'm not really all in on the form of
7:30
Speaker 1: year cycle, but I am in on selling May go
7:34
Speaker 1: away because that's happened in the Wall Street and the
7:36
Speaker 1: securities markets for quite some time. Another thing I want
7:39
Speaker 1: to get into is this government shutdown because this also
7:42
Speaker 1: has an impact on crypto, and that's why I think
7:45
Speaker 1: we're starting to seek Bitcoin starting to edge down. And
7:50
Speaker 1: I think there's two things that happen here, guys, Friday
7:52
Speaker 1: night is the shutdown time. Here's Schumer, he's talking about it.
7:56
Speaker 1: Take a look.
7:59
Speaker 4: The democratically funding the government should be a bipartisan effort,
8:04
Speaker 4: but Republicans chose a partisan path, drafting their Continuing resolution
8:10
Speaker 4: without any input, any input from congressional Democrats. Because of that,
8:17
Speaker 4: Republicans do not have the votes in the Senate to
8:20
Speaker 4: invoke cloture on the House cr Our caucus is unified
8:26
Speaker 4: on a clean April eleventh R that will keep the
8:30
Speaker 4: government open and give Congress time to negotiate bi partiesan
8:35
Speaker 4: legislation that can pass.
8:38
Speaker 1: We should all right, so you can see do they
8:41
Speaker 1: have any leverage the Democrats right now to even threaten
8:44
Speaker 1: that's humor up there. But I want to go to
8:45
Speaker 1: the next clip here because this will give us a
8:48
Speaker 1: little bit more insight. Take a look.
8:50
Speaker 2: Who came up?
8:51
Speaker 5: Did you come up with Schumer shutdown? Do you know
8:53
Speaker 5: who came up with that?
8:55
Speaker 6: I think Chuck Schumer actually came up with Schumer shutdown
8:58
Speaker 6: almost a month ago. He started talking anybody wants to
9:00
Speaker 6: shut down the government to be able to protest the
9:03
Speaker 6: Trump policies and what he's doing, and so yeah. I
9:06
Speaker 6: think actually Chuck Schumer actually invented the term humor.
9:09
Speaker 2: Shut down on it.
9:10
Speaker 6: At the end of the day, we're going to keep
9:12
Speaker 6: this government open.
9:13
Speaker 5: Could you possibly in the back of your mind you
9:17
Speaker 5: know eight Democrats that you think are possibly going to
9:21
Speaker 5: go for this or is there going to be some
9:23
Speaker 5: other route in the end.
9:25
Speaker 6: Everybody's going to have to make a decision on right now.
9:27
Speaker 6: There's a couple of options Democrats have, and I get
9:29
Speaker 6: what they're trying to do. They're trying to use the
9:30
Speaker 6: leverage that they have to say we're going to shut
9:32
Speaker 6: down the government if we don't get what we want.
9:34
Speaker 6: I get that they're trying to use their sole bit
9:36
Speaker 6: of leverage. And in reality, they don't want to hurt
9:39
Speaker 6: federal workers either. They don't want to hurt the economy either.
9:41
Speaker 6: I think there are eight reasonable Democrats that are going
9:43
Speaker 6: to step up and say, okay, let's keep it up with.
9:45
Speaker 6: The other option they have is they could just not
9:47
Speaker 6: fill a buster the bill. This bill would pass with
9:49
Speaker 6: fifty one votes and Republicans are rated to be able
9:52
Speaker 6: to pass it as long as Democrats don't fill a buster.
9:55
Speaker 6: The procedural motions the procedural motions take sixty. Final passage
9:59
Speaker 6: take fifty. So if Democrats just want to said we're
10:02
Speaker 6: not going to fill abuster it, we could still pass
10:04
Speaker 6: it on our own. So we'll see what actually happens.
10:07
Speaker 1: And I think that is the key, that's the paths
10:10
Speaker 1: to a non government shutdown is no filibuster, and I
10:13
Speaker 1: think that's what's going to happen. We're going to lead
10:16
Speaker 1: it right up to the twelfth hour, I guess on
10:19
Speaker 1: Friday night, so expect some volatility in the market until
10:23
Speaker 1: that time. Once it happens, do expect a little bit
10:25
Speaker 1: of a rubber bend effect, so we may see a
10:27
Speaker 1: little bit of a trend over the weekend. You look
10:29
Speaker 1: at a couple of things here on the USA Today breakdown,
10:33
Speaker 1: they kind of give it to you a little bit more. This,
10:35
Speaker 1: of course, is Wherehouse reps. This is how it got
10:37
Speaker 1: to where it is right now. In this led out
10:40
Speaker 1: with a two hundred and seventeen or two thirteen that
10:42
Speaker 1: passed and that was happening just this last Tuesday. Then
10:46
Speaker 1: you have the Senate, which is sitting here that's got
10:48
Speaker 1: to approve the bill by basically twelve o'clock tomorrow or
10:51
Speaker 1: Friday night. Then though the House Speaker, this is Johnson
10:55
Speaker 1: talking about this. He said, we have enough votes in
10:57
Speaker 1: the House to buy partisan divide in the Senate makes
11:00
Speaker 1: the bill passage uncertain. That's back to that clip right
11:02
Speaker 1: there where they're talking about all of that. So there's
11:05
Speaker 1: still a few things in the loom, but it does
11:08
Speaker 1: look like that. I just don't think that the Democrats
11:12
Speaker 1: will do it. I don't think they're pull the trigger
11:14
Speaker 1: and shut it down. Now if they do on midnight,
11:16
Speaker 1: if we don't get a passage of a government and
11:18
Speaker 1: we do get a government shutdown, it rolls into the weekend,
11:21
Speaker 1: look for some crazy buying opportunity. So be ready Friday night, guys,
11:25
Speaker 1: be on your trading tools because we're going to see
11:28
Speaker 1: some volatility that could go into the wee hours. Now,
11:33
Speaker 1: let's talk about the other side of things, and that
11:36
Speaker 1: is Wall Street. The magnificent seven premium relative to the
11:40
Speaker 1: rest of the S and P five hundred has now
11:42
Speaker 1: fallen to its lowest level since twenty seventeen, this pre
11:46
Speaker 1: pandemic level. This is a big deal because it shows
11:50
Speaker 1: that we are seeing a very different Wall Street. And
11:54
Speaker 1: there's two things that can happen here. One of course,
11:58
Speaker 1: is where we see a liquidity hit that is so
12:01
Speaker 1: hard that could push a lot of calls into selling
12:05
Speaker 1: crypto assets to cover those calls. And then there are
12:08
Speaker 1: other areas of this that it could also push people
12:11
Speaker 1: into more of the risk assets as a flight to safety.
12:15
Speaker 1: So there's a lot of angles on this. Now. Scott
12:18
Speaker 1: Bessen again you just saw a clip on him. He
12:21
Speaker 1: talks a little bit more about the stock market. Listen
12:23
Speaker 1: it well, but.
12:24
Speaker 3: Sixty two percent of Americans own stocks. I mean it's
12:27
Speaker 3: near twenty year high. So how can the White House
12:30
Speaker 3: not be concerned about hardworking americans four oh one k plans?
12:35
Speaker 2: Look that Sarah, I didn't say we're not concerned. I'm
12:38
Speaker 2: not concerned about a little bit of volatility over three
12:43
Speaker 2: weeks because if you look over the long term, the
12:46
Speaker 2: reason stocks are a safe and great investment is because
12:49
Speaker 2: you're looking over the long term. If you start looking
12:51
Speaker 2: at microover horizons, stocks become very risky. So we are
12:55
Speaker 2: focused over the medium long term. And I can't tell
13:00
Speaker 2: you that Marx is going to go up today, tomorrow,
13:02
Speaker 2: next week, but I can tell you that if we
13:05
Speaker 2: put proper policies in place, it's going to lay the
13:08
Speaker 2: groundwork for a both real income gains and job gains
13:13
Speaker 2: and asset continued asset gains.
13:16
Speaker 1: So this is where you have to watch your p's
13:19
Speaker 1: and q's because asset managers right now are holding only
13:24
Speaker 1: one point four percent of their assets in cash. This
13:29
Speaker 1: is their lowest cash allocation in at least twenty years.
13:32
Speaker 1: You look at Warren Buffett highest cash position. I know
13:36
Speaker 1: some money managers out here that about two weeks ago
13:39
Speaker 1: they exited their tech assets completely and went to more
13:44
Speaker 1: and more cash, a little bit of bitcoin. This could
13:47
Speaker 1: be the problem right here that is brewing, and that
13:50
Speaker 1: is a massive stock market fall. Now if that occurs, guys,
13:54
Speaker 1: there is nothing that's going to stop this market from
13:57
Speaker 1: a crater, and that could see Bitcoin moving back into
14:00
Speaker 1: that seventy two k we had Tim on the other
14:02
Speaker 1: day on an analysis that's where bitcoin could push back
14:05
Speaker 1: down towards seventy seventy two K. And if it drops
14:08
Speaker 1: below seventy K, that is an existential threat to bitcoin.
14:13
Speaker 1: Because of the positions of guests who Strategy and Michael Saylor,
14:18
Speaker 1: a lot of that all could be leveraged right here
14:21
Speaker 1: on this one bar chart, and that is no cash
14:24
Speaker 1: liquidity setting in the market. If it gets sucked out
14:27
Speaker 1: of the market and these positions get flushed, this is
14:30
Speaker 1: a problem for Wall Street and it's a problem for
14:32
Speaker 1: risk assets as well. Kobec talks a lot about this
14:36
Speaker 1: right here in this President Trump now believe short term
14:38
Speaker 1: pain is his only option to lower inflation. Listen, if
14:42
Speaker 1: we see another five percent out of the stock market
14:45
Speaker 1: coming off in the next ten days, woo. The market
14:50
Speaker 1: is going to be very, very, very upset and I
14:54
Speaker 1: think frustrated, and of course this will push everything to
14:58
Speaker 1: this stalling effect that we've seen and talked about here
15:01
Speaker 1: on the show. Is that it's not necessarily stagflation, because
15:04
Speaker 1: I think we will have inflation absolutely cratering. And the
15:07
Speaker 1: longer term situation that's going to play into this is
15:09
Speaker 1: how companies are trying to plan. That's when you throw
15:12
Speaker 1: in tariffs, and now you've got a whole mix of
15:15
Speaker 1: things that are not good and that could push you
15:17
Speaker 1: into recession. So you can kind of see these are
15:20
Speaker 1: all very negative things. The shutdown is just the beginning
15:23
Speaker 1: of this. The rest of this plays into some of
15:26
Speaker 1: the ways that the market is going to respond, and
15:29
Speaker 1: I think that's what we are facing right now. Trump
15:32
Speaker 1: also is talking about this right here. I mean, this
15:34
Speaker 1: was crazy. When I saw this first, I thought it
15:37
Speaker 1: was a joke. Trump family is now and talks to
15:40
Speaker 1: acquire a stake in Binance. This is going to be
15:42
Speaker 1: Binance US now. This is going after cz is going
15:46
Speaker 1: for a pardon. This is where it gets a little icky.
15:50
Speaker 1: I don't know, you guys are watching right now and
15:52
Speaker 1: you're thinking, what the f just happened? If Trump's this
15:57
Speaker 1: is most likely going to be come in from Donald
15:58
Speaker 1: Trump Junior and that they understand where the vision is.
16:02
Speaker 1: And I think the positive thing is that they know
16:05
Speaker 1: where the money is going to be going, and that
16:07
Speaker 1: is going to be in the crypto markets. Finance could
16:10
Speaker 1: go head to head with robin Hood and also coinbase.
16:13
Speaker 1: This would be a very intriguing but also very very
16:18
Speaker 1: questioned political and business move in the next few years.
16:23
Speaker 1: This could be the biggest one. This also could hurt
16:24
Speaker 1: Trump overall add in the Republican Party, So just be
16:28
Speaker 1: on the lookout for this one. This could get negative
16:30
Speaker 1: really quickly. Last thing I want to hit on is
16:33
Speaker 1: if you guys remember the government shut down back in December,
16:37
Speaker 1: very high percentage and then boom. It did not happen.
16:40
Speaker 1: It boils right up to the point and then it
16:42
Speaker 1: fell off. That's kind of where we are right now
16:44
Speaker 1: here on Thursday morning as we're recording this. I think
16:49
Speaker 1: you're going to see a lot more pain here, guys,
16:50
Speaker 1: So expect to continue to see a little pressure in
16:52
Speaker 1: the markets, and that's where I think you are. But
16:55
Speaker 1: I do think that they will finally get through. A
16:58
Speaker 1: filibuster will help you know that loose If you look
17:01
Speaker 1: the government shut down over on poly Market zooming in
17:03
Speaker 1: on that right there, it's still a sixty five percent chance,
17:06
Speaker 1: and the chance is spiked a little bit. So the
17:09
Speaker 1: mainstream media doing a good job at spending this negatively
17:14
Speaker 1: and in pro democratic fashion to be able to sway
17:17
Speaker 1: some of these sentiment numbers that we're seeing coming in
17:20
Speaker 1: from Polymarket. So I don't know, let me know what
17:23
Speaker 1: you guys think in the comments. So you think that's
17:24
Speaker 1: going to.
17:25
Speaker 2: Be the.
17:27
Speaker 1: Category of concern is the shutdown? Are you more worried
17:31
Speaker 1: about this main potential market crash incoming on securities? Let
17:36
Speaker 1: me know in the comments down below. Join the Diamond circle,
17:39
Speaker 1: and of course, if you're not in our telegram group,
17:41
Speaker 1: that's the place to be, man. It is where I
17:43
Speaker 1: am every day. I'm chatting with you guys. I love
17:46
Speaker 1: to have conversations with you guys. And of course if
17:48
Speaker 1: you want to reach me out there on ex it's
17:50
Speaker 1: just at Paul Baron. We'll catch you next time right
17:52
Speaker 1: here on tech Path