us on the brink!, page-54

US government in shutdown after stalemate over Obamacare stymies funding bill

"As president and as your commander in chief, I've work toward making sure you have the strategy, the resources and the support you need to complete the missions our nation asks of you," he said.

"Unfortunately, Congress has not fulfilled its responsibility. It's failed to pass a budget and as a result much of our government must now shut down until Congress funds it again.

"Those of new uniform will remain on your normal duty status. The threats to our national security have not changed and we need you to be ready for any contingency."
Damage could be severe

The ABC's business editor Peter Ryan says investors are worried that a prolonged shutdown could hurt the US economic recovery and and consumer confidence.

"This inability of the US Congress to agree on basic housekeeping has now become a very unfunny joke," Ryan told The World Today.

"But if it morphs into an impasse about the US debt ceiling, the damage could be quite severe. And of course a few years ago when the debt ceiling impasse last came up, Standard and Poor's removed America's AAA credit rating, which was a blow to America's credibility.

"Now there's also the question about whether investors seeking a safe haven will continue to pour their money into the United States which is the practice in times of trouble and crisis."

Professor Fariborz Moshirian, a director of the Institute for Global Finance at the University of New South Wales says destabilised investors might start thinking a bit more about China -not the United States - as the new currency to invest in.

"We are going to see significant implications - [the] US dollar as a major currency is going to be affected," he said.

"We know that global investors may reject basically US dollar as a major currency - may take away in the capital out of US, despite the fact that some people say 'Well, there will be more capital flowing into the US in this situation."
Impact on Australia

Ryan says the Reserve Bank, which this afternoon left the official cash rate at 2.5 per cent, has noted their concerns about budget impasses in the United States.

"We know that just looking at financial markets today, the uncertainty about this impasse ... saw Wall Street close around about 1 per cent weaker today," he said.

"In the lead-up to that, there were similar concerns in Europe as well, although there are some other concerns about the stability of Italy at the moment, but we didn't see too much drama pour into Australia.

"[The All Ordinaries Index] really has been quite flat and I think the reason for this is that uncertainty and instability from the United States when it comes to the US Congress is pretty much factored in, and there has been a lot of warning about what would happen."

http://www.abc.net.au/news/2013-10-01/us-government-in-shutdown-after-dispute-over-obamacare/4991400