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Lyn Alden (Pt 1/2) warns that Yellen could trigger 'breakage' and 'liquidity crisis' regardless of debt ceiling resolution.


Lyn Alden, Founder of Lyn Alden Strategy, and Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, discuss the debt ceiling , the Federal Reserve’s monetary tightening and how a miscalculation by the Treasury could cause ‘breakage’ and a liquidity crisis after the debt ceiling is resolved. Alden also gives an outlook on gold, Bitcoin, and de-dollarization. Follow Michelle Makori on Twitter: @MichelleMakori ( Follow Kitco News on Twitter: @KitcoNewsNOW ( Follow Lyn Alden on Twitter: @LynAldenContact ( 0:00 - Federal Reserve policy 6:47 - Banking crisis 13:30 - Debt ceiling and Treasury policy 18:42 - Investment implications 20:39 - Bitcoin adoption 23:00 - Bitcoin forecast 28:20 - Bitcoin risks 32:40 - Regulation 37:00 - De-dollarization and Bitcoin 41:27 - Gold #bitcoin #gold #crypto __________________________________________________________________ Kitco News is the gold standard in precious metals, commodities, cryptocurrencies, mining, and financial news. SUBSCRIBE to our channel to stay up to date on the latest market and industry news. For breaking news, views, charts, and data on precious metals, cryptocurrencies, and financial markets - visit us at To get market updates on the go, download the Kitco Gold Live! APP - Stay connected: Twitter - Instagram - Facebook - LinkedIn - StockTwits - Live gold price and chart: Live silver price and chart: Live crypto market data: Learn more about Kitco News: For more information on advertising, sponsorship and marketing promotions – please visit our online media kit at: www.kitco.com/advertising Disclaimer: Videos are not trading advice, and the views expressed may not reflect those of Kitco Metals Inc....(read more)


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Janet Yellen, the current US Treasury Secretary, has warned Congress that failing to raise or suspend the debt ceiling by October 18th could cause catastrophic consequences for the US economy. But according to Lyn Alden, a renowned macroeconomist and investor, the consequences of a debt ceiling breach are not limited to default risk, as "Yellen can cause ‘breakage’, ‘liquidity crisis’ even if debt ceiling resolved." In her recent blog post, Alden explains that even if Congress ultimately passes the necessary legislation to avoid a default, Yellen's actions could exacerbate the risk of a liquidity crisis. As she points out, Yellen has substantial powers when it comes to managing the Treasury's cash balance and deciding which bills to pay first. In a debt ceiling crisis, the Treasury will have to use its cash reserve to fund the government's operations, as it can no longer issue new debt. But the Treasury's cash balance is not unlimited, and it will have to prioritize its payments based on legal obligations and available resources. This process is called "prioritization." According to Alden, Yellen's prioritization decision could lead to "breakage," meaning that some payments could be delayed or not made at all, causing significant disruptions to the US financial system. For example, if the Treasury decides to prioritize debt payments to avoid default, it may delay or suspend payments to other obligations, such as Social Security benefits, government contractors, or federal employees. This could lead to a chain reaction of events, as affected parties could struggle to pay their bills or operate their businesses, creating a ripple effect throughout the economy. For instance, if a government contractor does not receive payment for a project, it may have to delay paying its workers or suppliers, who, in turn, could suffer financial difficulties. Additionally, Yellen's prioritization decision could trigger a liquidity crisis, as affected parties may sell their Treasury holdings to raise cash, putting downward pressure on Treasury yields and spiking market volatility. This could also affect other markets, such as the stock market, which tends to correlate with Treasury yields. In conclusion, Alden argues that Yellen's decision-making is critical in a debt ceiling crisis, and even if the debt ceiling is ultimately raised or suspended, there could be significant breakage and liquidity risks if her management is not effective. Therefore, policymakers must act with urgency to avoid a default and provide the Treasury with sufficient resources to meet its obligations while minimizing the risk of adverse consequences. Part 2/2: In the second part of her blog post, Alden discusses potential solutions and implications of the debt ceiling crisis. https://inflationprotection.org/lyn-alden-pt-1-2-warns-that-yellen-could-trigger-breakage-and-liquidity-crisis-regardless-of-debt-ceiling-resolution/?feed_id=106051&_unique_id=64839ec04d3a1 #Inflation #Retirement #GoldIRA #Wealth #Investing #Banking #bankingcrisis #Bitcoin #Bonds #cash #cashequivalents #crypto #dollar #economy #Equities #Finance #financenews #financialnews #Gold #goldprice #goldpriceforecast #goldpricetoday #investing #investingnews #Janetyellen #jeromepowell #Kitco #kitconews #LynAlden #michellemakori #news #operationchokepoint #preciousmetals #silver #silverprice #silverpriceforecast #Stocks #treasuries #Treasury #BankFailures #Banking #bankingcrisis #Bitcoin #Bonds #cash #cashequivalents #crypto #dollar #economy #Equities #Finance #financenews #financialnews #Gold #goldprice #goldpriceforecast #goldpricetoday #investing #investingnews #Janetyellen #jeromepowell #Kitco #kitconews #LynAlden #michellemakori #news #operationchokepoint #preciousmetals #silver #silverprice #silverpriceforecast #Stocks #treasuries #Treasury
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