Moreover, the overall pressures on the central government are essentially twofold and the pressures comes from two different directions. For one, the Federal Reserve can put pressure on the central government by exercising some sort of leverage in order to address the fiscal policy and thus the whole-of-government policy which has led to a latent crisis for the financial system and for the economy as a whole. And second, the Republicans can use the budget stalemate which may arise by September of this year as leverage and as a blunt tool to address the fiscal issue, with the fiscal issue, of course, being intertwined with inflation and shortages. 

But if there is no budget passed for the central government by September, then the government will not be able to pay the debt it has to lenders such as the Federal Reserve, and thus the budget standoff could be costly for lenders. However, the lenders will survive albeit with some losses incurred, whereas the government will come to a standstill. Hence, in the overall scheme of things, the pressures and the potential losses will be greater for the central government than for the central bank come September. 

In short, the goal is survival for the main parties involved, namely, the central government and the central bank. Both are seeking to survive the effects and the detriments of a decades-long policy which has set off an array of crises, from economic to financial to political and social and even environmental and ecological on a global scale. And in the immediate term or short run, the focus should perhaps be on the decisions and signals coming out of upcoming Federal Reserve meetings, whereas by September, the central government will be fomenting a reaction to such decisions and signals and in turn the central government reaction sometime by September will be key beyond the immediate or short term. 

In a sense, the core policy was a source of both the convergence and the rift between the central bank and the central government over the course of the last couple of decades. But arguably, the rift is now greater than the convergence, for a number of reasons. There is a “blame game” now in terms of the failure of the policy. Not only is there a blame game, but the blame game can only intensify as the consequences and effects of the failure continue to unfold and manifest over the course of time. ‘Silicon Valley Bank’ and others are the scratch on the surface. And if we were to decide or speculate as to whether this is the beginning of the crisis for the central bank and central government or the end of the crisis given that we have addressed the root cause of the crisis, chances are that this is merely the beginning of the crisis for both the central bank and the central government. But given its expertise and intelligence and the fact that it was not the cause of the policy, it is very likely that the central bank can turn the crisis into a winning situation for itself and thus survive, even if it does incur some losses, whereas it is less likely for the central government to turn the crisis into a winning situation for itself, and there are a number of reasons for this claim or suggestion. Experts and intellectuals of all different hues and shades can attest to these reasons better than I can.

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