Biden Halts New LNG Exports, Home Sales Rise, Deceptively Strong GDP As National Debt Inches Closer To $34.2T
Weekly Recap As Of Friday, January 26, 2024
According to Freddie Mac, mortgage rates increased this week.
30-year fixed-rate mortgage rates averaged 6.69% as of January 25, while 15-year fixed-rate mortgage rates averaged 5.96%.
Pending Home Sales Index increased 8.3% to 77.3 in December, vs. an increase of 1.5% consensus.
The upward trend is consistent with National Association of Realtor’s outlook for 2024 that anticipates a 13% increase in home sales year over year, and a 1.3% increase in home prices in 2024.
In order to prevent arbitrage (essentially free money to the banks) by the largest U.S. banks using the Fed’s emergency funding program, BTFP (discussed in this video), the Federal Reserve eliminated the arbitrage spread by raising the cost of borrowing under the program. Additionally, the Fed announced that BTFP will end as of March 11, 2024.
During the fourth quarter of 2024, the emergency facility was effectively a source of free money. From the end of November 2023 to January 25, 2024, the total borrowed amount increased from $114 billion to $168 billion. This represents a $54 billion increase, or 47%.
The U.S. national debt hit a new high - $34,135,530,482,291.88.
The U.S. Treasury borrowed $47 billion on January 25th, increasing the debt to a new record high.
Debt to GDP is up to 123%.
National debt is growing at the rate of approximately $3 trillion per year.
Interest payments on the national debt is now over $1 trillion:
U.S. Gross Domestic Product rose at an annual rate of 3.3% in the fourth quarter of 2023 vs. +2.0% consensus. Although GDP was stronger than expected, it declined compared to the third quarter (as of Q3 2023, GDP recorded an increase of 4.9%).
The positive GDP numbers should be viewed in the context of the U.S. deficit. Without the exponentially increasing spending, the GDP would likely be in the negative territory.
According to the Federal Reserve Bank of Atlanta, sales and employment growth expectations continue to decline:
Further, the latest report shows that firms have less confidence in the future sales growth than they did prior to the pandemic:
On Friday, the Biden Administration announced a pause on the approval of new licenses for plants to export U.S. liquefied natural gas. The Department of Energy will review the economic and environmental impacts of projects that seek new approval to export LNG to Asia and Europe. The review is expected to take months and will be followed by a public comment period.
The shocking move comes as Governor Gregg Abbott refused the White House ultimatum to comply with the Supreme Court ruling and turn over the border patrol posts to the Federal Government. Followed by the “Red State Alliance” sending their National Guards to Eagle Pass to aid Texas protect its border, President Biden halted new LNG exports which is an obvious attempt to force Texas into submission.
The move by the Biden Administration has multiple negative domestic and foreign consequences. The halted LNG projects happen to be in Texas, which will impact American workers. Europe is now in an increasingly difficult position too, as it refused to purchase Russian LNG and will now have to face higher energy costs, once again.
The BRICS bloc is moving forward with its efforts to create an alternative financial system. The New Development Bank announced $28 billion bond issuance, denominated in local currencies. This signals to the world that the IMF and the World Bank now have a rival that is far more appealing to the developing nations.
The details are discussed in a video available on YouTube and Rumble.
As inflation inched higher, the European Central Bank kept rates unchanged, stating that rates “will be set at sufficiently restrictive levels for as long as necessary”.
The EU’s central bank reportedly requested European banks to monitor social media for early signs of bank runs. The details are discussed in a video available on YouTube and Rumble.
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Lena
Good work. Gas prices are high in Europe because the CIA military industrial complex blew up the Nordstream 2 pipeline and now crippling energy prices are now killing thousands of innocent people. Who needs enemies with friends like these...
Biden's actions are typically that of child, who's taking his ball because they won't let him score a goal.
Nothing could be more shortsighted or detrimental to both the EU and US economy, as Europe battles rising inflation and declining GDP, while US GDP is built on the back of borrowed money, most often not even contributing the full value of the borrowed money, to GDP, which begs the question, how is this being accounted for in the US.
The EU will now have no option but to continue buying Russian tankered gas through 3rd parties, and expand those purchases.
The real question is, how long can the EU and US survive with cratering debt and either meaningless, or negative economic growth?