2024 Recap and mid Year U.S. Economic Report -

WWW.BOTDORFRESEARCH.COM
June 1st, 2024
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The State of State 2024 Mid-Year US Economic Report-Update. There is not much that is more
challenging than trying to calculate (some economist refer to this as guessing ) where the US and
global economies are headed twelve months into the future. For starters where does one begin?
We put out our US Economic Reports around December 20th of each year for the succeeding year.
We do not touch or change it after it goes out. We live or die on our forecasts and predictions we
make in December until the next year’s December report gets released.
We often go against the masses in our reports. For example when the financial media and Wall
Street were hell bent on “six or seven rate cuts for 2024”, we predicted in 2023 either “no rate
cuts at all or one to two small cuts at the end of 2024”. Our deep dive on several leading indicators
did not support the common thesis of any real rate cuts for 2024 at the time we released our
report in December of 2023.
Our research just did not conclude that the Federal Reserve would be in position to cut rates this
year. We felt the stock market would see 4-6% gains for the 2024 year, that Iran would see
bombing within their borders in 2024, and personal and business bankruptcies, consumer debt,
student loans and mortgage defaults would increase substantially in 2024. We also felt that
housing prices for median home prices nationally would continue to fall as they did in 2023. It is
why we felt US bonds may outperform equities because there is much less downside risk with the
same return. Bingo on these so far in 2024.
According to the New York Federal Reserve as of Q1, 2024, Household Debt is now at record levels
surpassing 2023, now sitting at $17.69 Trillion, up $184 Billion in just Q1. Student loan debt now
exceeds $1.7T and is fast becoming the second biggest debt behind a mortgage for many of the
40M people in the United States that have student loan debt. Student loan defaults are rising
under this burden as home ownership cost, food, gas, utilities, and insurance cost continue to
increase at rates much higher than the reported CPI increases.
We also predicted that any one of three isolated events could happen in 2024 with a 67% chance
that any one of these three events may occur in 2024 resulting in a severe backlash to the US
Economy. We predicted the two wars could merge into WWIII, now involving over fifty countries
directly and/or indirectly. By some account we are already there given over 650,000 lives have
been lost, and $184B was spent up through 2023 with another $100B being committed.
We also noted that China may provoke a war with Taiwan, something that is now on the verge of
exploding after what happened over the Memorial Day weekend with China encircling the island
with thirty-nine warships and 1,100 war planes on exercise. Taiwan was forced to meet this threat
by sending its own planes into the air to protect their sovereign air space. Finally we suggested
we could see some large regional bank failures in 2024 as billions in CRE loans face severe mark
downs to market. Despite U.S. regulators increasing stress test analysis and reporting
requirements, at some point a leaking dam has to break.
Lastly, we are set up for some type of terrorist attack on US soil in the next 18 months and are
now sitting at the highest threat level in decades. It will take years and a new border policy to
begin to reduce this threat level. It is the number one threat facing the CIA and FBI today other
than a nuclear attack from outside the U.S. Any one of these events will rock the stock and bond

2024 US ECONOMIC REPORT-MIDYEAR UPDATE WWW.BOTDORFRESEARCH.COM

markets and trigger a massive sell off in the markets like what happen in 2023 when Silicon Valley
Bank went down in less than a week after the first reports came out. The average P/E ratio at
twenty-three times plus is too high compared to our current U.S. GDP growth and coupled with
the current cost of capital and the above risk factors, has set the markets up for the highest
downside risk profile we have seen since world war II and the 2008 credit meltdown.
The underlying factors leading up to these predictions are now well underway. It took us fifty-six
pages to cover these and other issues in our 2024 US Economic Report released last December.
We also predicted the biggest issue in the 2024 election will be fighting over potential voter fraud
particularly in six swing states from ineligible, deceased and non-existent voters. The biggest
target state for both sides could well turn out to be Pennsylvania. More likely than not the road
to the white house will be determined by who wins PA. Our thesis on the other five swing states
has also not changed, although we do have some new predictions in this midyear update on what
may happen before the November election. The “Debates” to the extent they actually occur, will
impact less than 8% of all voters at this point, with a 60/40 split when it is all over, falling to one
side or the other, depending on the state. While small, this group could decide the election.
This is why this year we put out a small separate midyear update. As a matter of policy, all of our
other research reports on a wide array of subjects are always free on our web site
(www.botdorfresearch.com) except for the most current US Economic Report which becomes
free in December of each year and is replaced by the new year report.
We also leave the former reports on the website because they contain valuable research on
numerous topics like why we predicted billions will be lost on Electric Vehicles for years and why
they do not reduce carbon emissions after production pollution is factored in. We also reported
that the temporary uptick in housing prices in 2024 in many markets is a head fake, and why the
total decline in overall housing prices will fall 20% to 30% from 2023 through 2026. Last year the
National Association of Realtors reported an overall decline in all four quadrants of the United
States came in at 15.9%. We predicted this number would come in at 15%.
The reason housing prices remain high in tight markets is because many sellers cannot afford to
sell; cash out and then buy another home anywhere near like the one they had. This pricing
disconnect is due to mortgage rates being up to 200% higher than two years ago which is now
keeping home prices artificially high. Cash buyers are immune to the current interest rate
environment with most luxury buyers now paying all cash in high end markets. For the rest of the
housing market super inflation in mortgage rates, insurance policies, local taxes, maintenance
costs and utilities is keeping buyers out of the market, keeping home inventories at lower levels.
This is about to change over the next 18 months as many sellers will be forced to sell due to
divorces, job losses and job transfers and the need to raise cash. Also Baby boomers are retiring
at the rate of over 300,000 persons per month which eventually has to drive nest egg sellers into
the market. This disequilibrium is causing many to confuse the housing market as healthy. The
market is never healthy when the vast majority of home owners and move up buyers cannot
afford to buy the home they live in. We note the latest figures from the National Association of
Home Builders. Traditionally new home prices falling comes before severe market declines.

2024 US ECONOMIC REPORT-MIDYEAR UPDATE WWW.BOTDORFRESEARCH.COM

-The median sales price for new homes was $431k in March of 2024. That is down from the
record high of $497k in October 2022. This is also in line with our 20% to 30% estimated drop in
home prices from 2023 into 2026.
-Builder confidence declined this month for the first time since November 2023. Previously, for
April, the National Association of Home Builders reported that 22% of builders cut home prices
last month. The average price reduction was 6%. The use of sales incentives edged down slightly
from March.
We note this home price decrease is just for the month of April and represents just one month of
price adjustments that will continue well past the election given the current interest rate
environment. This fall out is now beginning to hit local markets selling existing homes.
There is one formula that is working very well, however. Sell your home, take the money, pay cash
for your next home, and move into a tax free state. We called this trend over two years ago and
we are now seeing the biggest influx of home buyers in over thirty years into tax free states. It is
going to take the Governors initiating and driving legislation in these high tax states by having
the guts to lower taxes, provide business incentives, and getting their deficit spending under
control to reverse this trend that is likely to continue for years to come.
Each Governor of high tax states has little incentive to make the hard choices in favor of kicking
the can down the road for the next Governor to deal with. This playbook has been in use for
decades and is why states like California that had net inbound migration for over one hundred
years are now seeing net outbound migration for the third year in a row. This net outbound
migration is resulting is a spiraling deficit for California now approaching over $68B for this year.
Money goes where it is best treated- and eventually so do many people who work hard for their
money.
Our predictions have become even bolder as we reach the midpoint of 2024. We caution our
readers that given our current forecast and despite our great track record over the past three
years, we are due for being wrong at some point. That does not stop us from making unpopular
predictions when the data are pointing toward increased risk in many economic and geo political
environments. We tend to conduct intensive research to reach our conclusions and we like to
have as many relevant data points as possible to support our positions. This practice will remain
in force even if it means we are going against the popular media opinion of the day, something
our research continues to opine on.
Our 2024 US Economic Report was our longest ever-at 56 pages. Our calculations were more
complicated because of two major wars that remain on going in Ukraine and in Gaza including
the surrounding proxies involved adjacent or near the Israeli borders. One might ask, what does
the Ukraine War have to do with the US Economy? Well, for one, Ukraine was the second largest
producer of grain in the world (behind the U.S.) so the war has impacted the cost of cereal and
all grain products, like bread. Secondly, the US budget must be revamped to accommodate war
spending by the U.S. to support the war. This only increases the deficit which through a series of
events we explained in our 2022 and 2023 reports, just increases inflation. It is why the days of
2% inflation are over for a long while.

2024 US ECONOMIC REPORT-MIDYEAR UPDATE WWW.BOTDORFRESEARCH.COM

These two wars are also affecting the overall cost of capital for all nations, driving up global
inflation, creating shortages, and creating the need to increase defense spending around the
globe. This is taking funds away from social programs, spending for infrastructure programs, and
is now slowing down GDP growth on a global basis, thereby producing a negative trend in Money
Velocities on all continents. Money Velocity is how many times a unit of currency turns over in a
year for a given country, so the higher the MV the higher the GDP and vice versa.
In short these wars besides costing several hundred billion so far are taking precious lives and
show no signs of easing up this year. The latest figures are approaching 600,000 lives lost on the
Russian side of the war. Ukraine has fared much better with just under 40,000 lives lost. This is
due to the clever use of attack drones and western weapons that fly smarter and can react very
quickly to troop maneuvers. These weapons in many cases are smarter and off the radar of most
Russian defensive capabilities. Russia is trading lives for weapons in this war, now losing around
a thousand troops a day, a number that is not sustainable.
We note the math on what these wars cost just through 2023 below. With over seventy countries
on the IMF “Watch List” for danger of defaulting before the wars even broke out, we now have
one third of all countries well overextended on debt and even large, industrialized countries like
the United States, are going to feel the pain of this war debt. We covered these alarming debt to
GDP ratio’s and how they will slow global growth in detail in our 2022 and 2023 reports any why
they will prove to be problematic and inflationary going forward as these defaults increase.
As noted below, as of the end of 2023, over $184B has been pumped into the two wars and this
does not include the increased military spending many Nordic and European countries are
pouring into their military budgets. This of course excludes the latest $61B package the United
States just committed in April of 2024.
These wars are also causing havoc in the China Strait, where China, the Philippine’s, Australia, and
Japan are vastly increasing their defense spending as a by-product of the Ukraine and Israeli wars.
Before 2024 is over, we estimate that over One Trillion dollars will be redirected into weapons
and increased military armies as a result of these wars from over fifty countries, and now, an
extremely dangerous environment in the China Strait.
China realized over ten years ago they did not have the logistical assets to mount an attack on
Taiwan. They started on a dedicated program to develop, build, and convert what is now over
300,000 cargo, civilian and military ships, and boats to manage this task. They also build several
islands within military reach of Taiwan “to be ready” when this day comes. Special training, newer
military planes and contingency and logistical support are now in place.
When President Putin recently met with President XI of China about a month ago, they had
something in mind for the US to be released on Memorial Day. On Saturday, May 25th, Ukraine
saw one of its heaviest days of fighting and bombing while China entered into war games by
surrounding and in some cases blockading access into and out of some portions of the China
Strait. This has now caused the U.S. to send in the President Reagan Super Carrier, the most
powerful Military Carrier in the world. She does not come alone. A considerable number of anti-

2024 US ECONOMIC REPORT-MIDYEAR UPDATE WWW.BOTDORFRESEARCH.COM

submarine, attack frigates, logistical, and attack craft are part of what comes with this super
carrier.
The U.S. is now in communication with the Netherlands, Japan, South Korea, Vietnam, and the
British to monitor the China Strait around Taiwan. The “Island Chain Strategy” once employed by
the United States seventy years ago, is now top of mind for the overall strategy to defend the
China Strait and protect the sea lanes that serve one third of the world. Tensions are now the
highest they have been in decades, and the probability of a mistake or false interpretation is about
as high as it can get without being in a formal war.
As a result the U.S. will soon see its first One Trillion dollar military budget by the end of 2025.
again pulling money away from medical, social and infrastructure programs, also seeing pressure
to cut social benefits sooner than later. While this is great for the Industrial Military complex and
the defense contractors that feed the war machines, it does not do much for the average citizen
and eventually will erode the quality of life for all nations, particularly the United States.
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TOTAL COST OF UKRAINE/ISRAELI WARS UP THOUGH 2023:

The most recent data suggest that Ukraine will continue to focus its attacks on defensive positions
by wearing down Russian troop advancements in several key cities critical to key supply lines.
Also, under relaxed rules from many countries, (including the U.S.) Ukraine and anti-Putin factions
inside of Russia are increasingly attacking Russian assets and fuel depots, trains and even fighter
jets inside of Russian borders. These attacks coupled with shortages, inflation, and falling Russian
GDP, along with 600,000 Russian and foreign lives lost fighting for Russia, are wearing down the
2024 US ECONOMIC REPORT-MIDYEAR UPDATE WWW.BOTDORFRESEARCH.COM

patience of Russian citizens. This has resulted in Putin himself evacuating the Russian Palace on
more than one occasion pending riot arrests and the Putin police and the Russian Federation
Security Forces increasing coverage to dispel larger and larger crowds. Putin’s problems are
mounting on all fronts of the war and are starting to impact him domestically as violence increases
inside of Russia. This war has now become inflationary for countries around the world.
WHY THE FEDERAL RESERVE DOES NOT ACTUALLY DETERMINE INTEREST RATES BY THEMSELVES
It is logical to assume that the Federal Reserve Board and the Board of Governors known
collectively as the Federal Open Market Committee, controls the overall direction of interest
rates. While this is true on some level, the Federal Reserve does not control global demand for
U.S. debt. The global credit and debt markets decide demand for U.S. securities and thereby over
time, impact how and when the Federal Reserve may act.
Historically, demand for U.S. T-Bills and U.S. Bonds has been strong, but U.S. demand is not
immune from international pricing pressure. As an example China has reduced its holdings in U.S.
debt over the past ten years by liquidating over two trillion dollars of U.S. bonds, recently again a
net seller of $53 billion in U.S. bonds. Japan is currently the largest foreign owner of U.S. bonds
at just over $1.1 Trillion. We note several facts about the Federal Reserve below.
“Nearly half of all US foreign-owned debt comes from five countries. All values are adjusted to
2023 dollars. As of January 2023, the five countries owning the most US debt are Japan ($1.1
trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and
Luxembourg ($318 billion)”. (usafacts.org, 2024).
It is the Federal Reserve's actions, as a central bank, to achieve three goals specified by Congress:
maximum employment, stable prices, and moderate long-term interest rates in the United States.
(federalreserve.gov. 2024).
“The FOMC consists of all seven members of the board of governors and the twelve regional
Federal Reserve Bank presidents, though only five bank presidents vote at a time—the president of
the New York Fed and four others who rotate through one-year voting terms.” (Wikipedia.org,
2024).
Think of the International Bond Market as the Super Bowl of Bond Debt from countries around
the world. The Federal Reserve Board represent the US referees on U.S. soil, they are not the
players in the game. The players are the countries, companies, and individuals that buy and sell
the bonds. While the referees can influence a short term outcome, in the long run, it is the buyers
and sellers of the bonds who influence the outcome, and by association the price of U.S. debt and
therefore the price of money in the United States.
Given last year’s downgrade of US debt by the Fitch’s Bond Rating Agency, (see out earlier
reports) and the ballooning U.S deficits, some countries are selling U.S. bonds and reducing their
bond exposure to U.S. debt, especially the BRIC countries. It was not that long ago when China
owned over $3T in U.S. debt, now down to $859B. Our deficits spooked them into dumping U.S.
bonds into the global markets. In all fairness, they also needed the cash to shore up their real
estate problems, which are substantial. (see our 2023 Report).
2024 US ECONOMIC REPORT-MIDYEAR UPDATE WWW.BOTDORFRESEARCH.COM
Eventually if the deficit continues to spiral out of control, now up to $34.7 Trillion dollars, the U.S.
will start to see stress in the bid to cover ratio, meaning less demand for U.S. bonds. As we have
to compete with not only selling bonds every quarter to finance the deficit, but we also compete
with sellers who already hold U.S. bonds, also selling at the same time. That means there could
be more supply in the market at some point. If the holder of U.S. debt (U.S. bonds) wants to
unload a large block of debt, they are free to set the price. The world markets can only absorb so
much U.S. debt at a time and at some point foreign holders could elect to set prices below U.S.
auction sale prices. To some extent, this means other countries could decide or have influence on
the price of our debt. Although the U.S. bond market is the largest in the world, it is not a market
without limits, particularly with record amounts of global debt needing to roll over.
We spent considerable time discussing world debt in our 2022 and 2023 US Economic Reports
and why global demand to finance debts is at unhealthy levels around the world with some
countries now over 3 to 1 on their debt to GDP levels. The USA is now pulling past 1.20 to 1.00
and headed for much higher ratios in the years ahead. This is a perfect storm brewing on why the
price of U.S. debt is likely to rise than fall in the future, meaning the Federal Reserve could be
forced to increase interest rates because the global cost of capital is setting up to rise to keep the
debts rolling over. Remember the Super Bowl analogy. There is not much the referees can do
about the outcome if Patrick Mahomes throws six touchdown passes in the game. If demand
weakens in the years ahead for US debt especially from financial engineering by BRICS, the U.S.
could be forced to raise rates irregardless of how the U.S. economy is faring. The Federal Reserve
will be powerless to cut rates in the face of the global debt Tsunami that is building and already
at dangerous levels. This includes the amount of U.S. debt in the market.
What is BRICS and its purpose?


“BRICS refers to certain emerging market countries--
Brazil, Russia, India, China, South Africa, and more—that
seek to establish deeper ties between member nations
and cooperate on economic expansion, including trade.
The countries function as a counterbalance to traditional
Western influence.” (Investopedia.com).
“While the renminbi will be the main currency for trade, payments, and settlements within
BRICS, the role of a new prime holding currency offers fresh possibilities. Regarding trade,
Saudi Arabia and the UAE will most likely trade with China in renminbi, independent of the
denominator currency.” (omfif.org. Feb 29, 2024).
What is BRICS trying to accomplish?
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BRICS countries aim to create new economic
and trade systems separate from the U.S.-led
Western systems, according to the group.Aug
21, 2023
“Over 40 countries, including Iran, Saudi Arabia, United Arab Emirates, Argentina, Algeria,
Bolivia, Indonesia, Egypt, Ethiopia, Cuba, Democratic Republic of Congo, Comoros, Gabon, and
Kazakhstan have expressed interest in joining the forum, according to 2023 summit chair South
Africa.” (reuters.com Aug 21, 2023).
If this trend continues, demand for U.S. debt as the “number one global currency” will cease to
exist and the United States could be in danger of being just another currency. In fact it is baked
into the stars at this point unless the U.S. radically reverses existing monetary and fiscal policies.
The fallout from the dollar unwinding its status as the world’s currency will mean that the United
States could lose its status as a Super Power nation over the next decade. Without other countries
financing our debts, our cost of capital will soar driving interest rates in the U.S. to more than
double from where they sit in June of 2024. A large part of the world is lining up to crash the U.S.
dollar and we need to get serious about reducing our deficit to withstand what is coming.
Many people rightfully think that the dollar is the strongest currency in the world. While it is
currently the most traded, it is far from the strongest currency in the world for the reasons we
have stated herein. Here are the top eight strongest currencies in the world and their respective
exchange rates of the last week of May, 2024.
1-The Kuwaiti Dinar-$1.00 US equals .31 Dinar.
2-The Bahraini Dinar-$1.00 US Dollar equals .38 Dinar.
3-Omani rial-$1.00 US Dollar equals .38 Dinar.
4-Jordania Dollar- $1.00 US equals .71 Jordan Dollar.
5-Bristish Pound-$1.00 US equals ..78 British Pound.
6-Gilbraltar Pound-$1.00 US equals .78 British Pound.
7-Cayman Island Dollar-$1.00 US equals .83 Cayman Dollar.
8-Swiss Franc-$1.00 US equals .87 Swiss Franc.
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How and Why do Currencies Rise and Fall Against the Dollar?
The rule is simple, on the world stage the strongest currency with the strongest balance sheet is
what the world, companies and individuals want to own. It is why smart investors in the US have
coveted the Swiss Franc for decades although that is starting to change. As we note from above,
the Swiss Franc, a coveted currency for over 75 years, is now falling below many of the Mideastern
countries on the most valuable currency scale. To provide a better understanding of what happens
when currencies change value we will compare the U.S. dollar to the Kuwaiti Dunar.
Kuwait has total debt of $14 Billion which is only 3.12% of their GDP. This stat comes from the US
Federal reserve in St. Louis.
“According to the World Bank, Kuwait's estimated gross national income (GNI) per capita in 2024
is $160.4 billion (nominal) and $264.3 billion (PPP). This makes Kuwait the fifth richest country in
the world by GNI per capita.” (Wilipedia.org, 2024).
“As of April 2024, the International Monetary Fund (IMF) estimated Kuwait's total government
debt to be 3.12838% of GDP. This is down from 11.70408% of GDP in 2020. Trading Economics
predicts that Kuwait's government debt to GDP will reach 4% by the end of 2024 and 6% in
2025.” https://fred.stlouisfed.org/series/KWTGGDGDPGDPPT. 2024.
The US is on track for a GDP of 25.6 Trillion (we believe it will come in lower in 2024) and has
total debt as of May, 2024 of $34.7 Trillion. Kuwait’s has (160/14) 11.42 times revenue against
their total debt. The U.S. currently has (34.7/25.6) 1.35 times revenue against total debt. Which
debt would you prefer to own? I know I would sleep better putting a billion dollars into a country
that makes over eleven times the revenue to cover debt versus one that can barely gross over
one times.
The irony of this problem for the U.S. is if we just opened up our drilling for oil and gas (some of
the largest reserves on the world) we could vastly increased our own GDP, dramatically cut our
need to import oil at much higher costs, and we could slow the need to borrow money to cover
our operating cost. Instead we are watching our dollar fall each year, while the Mideast gains
purchasing power against our dollar. The reason Kuwait’s PPP (Purchasing Power Parity) is over
$263 Billion a year, is because when they buy something on the world stage against other
currencies they convert at such high exchange rates against other currencies, they get a discount
of (160/263) 64%, adding $103 Billion in purchasing power. Can you imagine spending $100B but
only having to pay $36 Billion?
This why our country is in trouble. When a weak currency buys something against a strong
currency, they always pay a premium to make the deal. The Kuwaiti Dinar (KWD) is now the
strongest currency in the world due to their oil reserves. Frankly, they are not worried about the
decline of fossil fuels and future demand and neither are US energy companies that produce fossil
fuels. If EV production increases from here the U.S. will need to vastly increase its imports and
production of fossil fuels to supply the electricity needed to power more EV’s.
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“In 2023, about 4,178 billion kilowatt-hours (kWh) (or about 4.18 trillion kWh) of electricity were
generated at utility-scale electricity generation facilities in the United States. About 60% of this
electricity generation was from fossil fuels—coal, natural gas, petroleum, and other gases”.
(U.S. Energy Information Administration, EIA, www.eia.gov. 2024).
We saw Japanese electric rates vastly increase after their nuclear accident on March 11, 2011.
We note the incident as reported by the Scientific Committee on the Effects of Radiation.
“The Fukushima Daiichi nuclear power plant in Japan experienced an accident on March 11,
2011, caused by the Great Tohoku earthquake and tsunami. The accident is the second worst in
nuclear power history, after the Chernobyl disaster.” (www.unscear.org.2011).
Japan was immediately forced to dramatically increase utility rates which began to rival rental
and mortgage payments shortly after the incident. They also had to replace nuclear power with
fossil fuels from Australia and Russia.
“After the Fukushima Daiichi nuclear power plant meltdown in 2011, Japan's electricity prices
increased due to higher fossil fuel costs from increased imports. The country's electricity
generation shifted to fossil fuels, with older oil-fired plants increasing their generation from
10% in 2010 to 14% and natural gas increasing to 35% of the power mix in 2011. Japan now
generates 60% of its power from coal and liquid natural gas imported from Australia, Malaysia,
and Russia.” (Google, 2024).
If current policies on U.S. drilling and coal production remain in place we will need to increase
our fossil fuel purchases from Venezuela, China, Russia, and the Mideast, further putting pressure
on the dollar and supporting regimes plotting to ruin our country and our currency. (See our
current and past reports for more details). Under any circumstances by enriching communist
regimes and buying fossil fuels overseas we are creating inflation in the U.S. be keeping energy
prices to high. We are also creating more pollution to import these fuels and in the process
actually increasing global carbon emissions. Transporting oil to our shores from large Diesel Oil
Tankers and from countries using far less efficient drilling practices to pull the oil out of the
ground is more taxing on the environment than if we just pulled it out of the ground domestically.
The world will use over 101 million barrels of oil per day in 2024, regardless of what country
produces it. Oil consumption is a zero sum game when calculating the global pollution emissions
released into the atmosphere. The only thing that changes from the U.S. shutting down
production of oil and gas is the price. We pay a hug premium on what it cost to fill our tanks so
we can pretend we are saving the planet.

The 2024 RACE TO THE WHITE HOUSE-WHY BIDEN MAY HAVE TO RESIGN AFTER THE ELECTION
The United States economy is facing a future with a devalued dollar, projected negative real
growth in the U.S., rising rates (again) likely sometime in 2026 and 2027, an extended frozen
housing market out of equilibrium, over regulation to the tune of $1.7T in the last three years
levied onto businesses, and a stock market that is stalled outside of the “Elite Eight”-(See our
2024 Report). Small caps are struggling to get financing and soaring deficits are not going to help
them or the U.S consumer already struggling with well over One Trillion in consumer debt for
the first time ever.
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Technically speaking we have had two consecutive down quarters of GDP at 3.40% revised in Q4
of 2023 and a huge downdraft of 1.60% revised for Q1 of 2024. This compares to 4.9% from Q3
of 2023. We can stop using the term healthy economy, goldilocks economy, and the pending soft
landing that may occur. We are now in route to using fasten your seatbelt, put your heads down
and your seat in the upright position. The Press as usual is well behind what is setting up with the
U.S. dollar and will be throughout the election. When was the last time you heard someone
mention that the BRIC transition is well underway and will be one of the main reasons interest
rates will have to rise in the longer term? The financial media will not figure this out for the
pending election but might be focused on this topic for the 2028 election when the carnage
becomes more widespread.
As to the election we have studied the pending rumor mill, and made some well-placed phone
inquiries, and are now predicting what we feel is going to be an outcome. Unfortunately, the
Biden/Trump feud is going to get worse. The House Oversight Committee is nearing a two year
investigation of what really happened with Biden and his family. They now have over three
million emails, texts, documents and sworn testimonies that confirm over $24M was wired into
accounts controlled by the Biden family as confirmed by James Comer, Chairperson of the 2024
House Oversight Committee. No one that testified seems to know what the money was for, even
the family members who got the money. Does this make sense?
He recently confirmed these numbers in an interview with Maria Bartiromo on Fox News.
Whether or not the Biden base wants to believe there is no evidence does not matter at this
point. This issue is about to haunt Biden forever. Mr. Comer described the wall of evidence as
“Possibly the worst public corruption scandal in U.S. history.” There is only one tangible way out
for Biden at this point and that is to seek a Presidential pardon for all of his “alleged crimes.” This
will not come from Trump if he wins. The House Oversight Committee will present one of longest
and most in depth reports ever created for Congress against a sitting U.S. President sometime this
summer.

While this report may not change many Biden voters, it will have an impact on the election results
as some democratic voters either change sides or just refuse to vote at all. Some Trump voters
may do the same given his legal issues. That said, both candidates will continue the fight.
Who do we know that might enjoy becoming President if only for three months? We believe if
Biden fails to notch up significantly in the polls after the debates, (which may not even occur)his
only way out given his legal issues may be to resign and wait for the inevitable Presidential pardon
that will come from Kamala Harris as President from September of 2024 to January of 2025.
If Biden should retake the White House, he will be able to kick this problem down the road and
deal with it later. If Trump should win in November, we put the odds of Biden resigning in
December as President at about 90%. While we prefer to stay away from political issues, given
the issues we have raised in this report, our 2025 U.S. Economic Report is entirely dependent on
who wins the white house in November.
As to rumors that Gavin Newsome or Michelle Obama will be the new Democratic Nominee at
the DNC convention, it is possible, but we see both as long shots to win the election. Gavin’s

2024 US ECONOMIC REPORT-MIDYEAR UPDATE WWW.BOTDORFRESEARCH.COM

recent fascination and visits with world leaders is fueling speculation he will be penciled in at the
at the upcoming DNC convention. We are not sure given his state’s $68B deficit and his relative
lack of experience, that he will have the goods to win over voters in 2024. He looks more like a
2028 candidate to us, but his nomination if he can clear the legal issues, would not surprise us.
The formal “odds” of Newsome winning the White House in November are 3.9%. As Newsome
might put it, “So you saying I have chance”?

YES, IT REALLY IS THE ECONOMY-STUPID. One of our biggest challenges putting out the 2024
Report was we had to make our forecast in November of 2023 for our December release. We had
just got the Q3 GDP report showing the economy posted a record high number of 4.9% for Q3 of
2023. Meanwhile, our pending Q4, 2023 and future predictions for 2024 was for negative growth
in real terms for 2024 GDP. Were we wrong? I thought about what am I missing as we were
releasing last year’s report? Did we need to reevaluate our thesis? Biden never looked so smart
after that the Q3-2023 report came out. Eventually I made the call to go with our original forecast
and cited in the report that the Q3 GDP was an “anomaly”, it was not going to stick and in fact,
GDP is going to get worse, a lot worse. Then came the numbers, Q4 of 2023 came in at 3.4%,
down sharply from Q3, and Q1 of 2024 came in at a paltry 1.6%. It took time for the reasons we
cited to see the trend fully develop. We expect that Q2 GDP will beat Q1 1.6%, technically pulling
the US out of a recession. In reality, our headwinds are likely to put us right back into one.
We often get so far ahead of the curve, we might look a bit off in the short term, like right now
without significant changes in U.S. fiscal and border policies, why the dollar is destined to devalue
from here and why housing prices are in the process of a pending steep decline. Last year’s 15.9%
overall decline nationwide, and the recent April housing decline of 6.6% that just came in from
Redfin, our 2024 housing forecast is on the mark.
These markets will see declines albeit many high end luxury markets and gated communities will
see smaller declines when they do come. Given the root causes of what is happening with interest
rates and the historical gap with median income versus median housing prices at all-time highs,
the trend is already in motion and has now hit the home builders. Either wage earners need a
significant rise in incomes of at least 25% from here or housing prices need to fall. One or the
other is inevitable.

THE U.S. ECONOMY FOR THE SECOND HALF OF 2024-REPORT CONCLUSIONS.

Most commentators and analysts use as a practical definition of a recession, two consecutive
quarters of decline in a country's real (inflation-adjusted) gross domestic product (GDP)—the
value of all goods and services a country produces. (www.imf.org. 2023). Well, according to the
traditional definition of a recession, which started in Q2 of this year we already met the classical
definition of being in a recession. In fact the GDP growth was so low in Q1 of this year, it is possible
for Q2 of 2024 to slightly beat the 1.6% figure, meaning we will by technical terms, be out of a
recession. We do not think it matters much at all weather Q2 beats the Q1 1.6% number. Over
the course of this year, we maintain our forecast of a breakeven to slightly negative real growth
for the U.S. economy, which means even stretching the technical definition of a recession, the
U.S. economy is headed for trouble given all of the issues we have highlighted in this report.
2024 US ECONOMIC REPORT-MIDYEAR UPDATE WWW.BOTDORFRESEARCH.COM

Many economist and technical analyst that watch M2, debt to GDP, and deficit growth have stated
these indicators are outdated and by themselves do not mean much. They have a point; however,
we prefer to expand our analysis and include the Inverted Yield curve, the housing markets,
consumer confidence sentiment, business investment, core inflation along with food and gas,
defense spending, real wage growth or lack thereof, and exploding Social Security, Medicare and
Medicaid cost. This year we can add another $500 Billion to pay for immigration. When factoring
all of the real cost absorbed by the U.S. Government, and by looking at them together, we feel
we can draw a fairly good picture of where things are headed.
Yes, the M2 money supply is also currently shrinking the most since the Great Depression. The
M2 money supply includes coins, physical currency, retail money market funds, and small time
deposits.

“From April 2022 to May 2023, the M2 fell by 5.5%, which may also end up close to the rate of
inflation when the final numbers come in, if you include gas, insurance cost and food, something
we think matters a lot to the American public. This is the first time the U.S. money supply has
shrunk since 1949 at this level, and is due to a number of factors, including: Rising interest rates,
the Fed reducing its balance sheet holdings by around $800 billion, and Changes in Fed
policy.” (Ycharts.com).
What happens if M2 continues to fall?
"For a fractional reserve, debt-driven economy, declines in M2 are akin to economic starvation."
Declines in M2, as the US is seeing now, have been correlated with economic depressions and
panics, Anastasiou said.” (spglobal.com. May 31, 2023).

We note from Larry Kudlow on Fox news the cost of regulation over the past three Presidents,
Obama, Trump, and Biden. Kudlow reported the following numbers on his show on 5-21-24. The
cost of new business regulations were as follows for companies in the United States, The Obama
Administration added $303 Billion, Trump cut out $163 Billion, and Biden has now added a
whopping $1.6 Trillion in new business regulations. This is all coming on the heals of higher
inflation, higher taxes on the way, and what will be the staggering cost of paying for 10M
immigrants in the United States. The real victim of the cost of living rising so high is the consumer.
There is very little left on the tank for consumers to keep spending at the current rates.
We already spend $1.7 Trillion more that we take in revenue in the U.S. Total revenue for 2023
was $4.5T while we spent $6.2T. According to the House Committee on Homeland Security, it is
estimated the medical, education, housing, food, training, and shelter cost to support
immigration will cost tax payers over $450 billion per year added to the deficit. In other words
we are going to spend just over 10% percent of all of the revenue collected by the U.S.
government to pay for immigration and that figure will keep rising as long as the border remains open.

2024 US ECONOMIC REPORT-MIDYEAR UPDATE WWW.BOTDORFRESEARCH.COM

We actually put the cost at a higher figure when crime, transportation, translators cost for
schools and for processing immigrant paperwork from over thirty-five countries, and counseling
cost are added into the calculation. Most Americans believe in responsible immigration to allow
others to pursue the American dream. I am also willing to bet that 90% of American have no idea
how expensive a wide open border policy is and the burden it will cost tax payers for generations.
“The federal government collected $4.5 trillion in revenue in fiscal year 2023 (FY 2023). The
federal government spent almost $6.2 trillion in FY 2023, including funds distributed to states.
Federal revenue decreased 15.5% in FY 2023 but remained almost 8% higher than in FY 2019.”
(usafacts.org. State of the Union, 2024).”
“The spending “could cost as much as an astounding $451 billion,” per year, the report stated,
citing research from the Center for Immigration Studies in May 2023. “The population of the
United States is roughly 330 million, plus perhaps 15 million illegal migrants. Nov 16, 2023.”
(homeland.house.gov. 2023).

Let us Do the Math.
So we haul in $4.5 Trillion in Revenue and we spend $5.1 Trillion before actual operating expenses
the government needs for millions of programs not listed below that we use to run the country.
1-We need $1.4 Trillion just for interest on the national debt. This number will rise because the
cost of capital is rising, something Congress should pay attention too.
2-We spend $900 Billion on Defense.
3-We need $1.3 Trillion for Social Security.
4-In 2024 Medicare will cost just under One Trillion Dollars.
5-We now spend $500 Billion each year to support Immigration.
So without factoring in the millions of line item expenses needed to run the country, we spend
$5.1 Trillion per year and are around $600 billion in the hole before we spend one dime to actually
run the government and fund all of the other social, infrastructure, clean energy, water,
education, and other local projects we need to replace, repair, and maintain our infrastructure.
Last year we needed to borrow another $1.7 Trillion just to get by and pay the bills. It is time for
Americans to start voting with their wallets and forget about ideologies for a while. 
2024 US ECONOMIC REPORT-MIDYEAR UPDATE WWW.BOTDORFRESEARCH.COM
A bankrupt country is not a country with a bright future. This is fundamentally why the current 7% mortgage
rates will seem like a bargain compared to what just might be coming over the next two to three
years. If rates hit 10%, people will be saying remember when mortgage rates were 7%? One or
two small quarter point rate reductions, if they come at all, will be just like the refs calling back
one of Mahomes six touchdown passes. In the long run it will not make any difference in the
outcome. It is about what will follow into 2026 and 2027 that matters. What follows will be 100%
dependent on the U.S. fiscal policy in 2025.
Afterall, the numbers do not lie. They are not the result of any one President; they are not at this
level because of just Democrats or just Republicans. They do not have a political bias. They are
here at current levels because we as a people have acted like fiscal prudence does not matter.
This is the time to remember the late great President, John F Kennedy.
“Ask not what your country can do for you, ask what you can do for our country.”
It is time for all U.S. politicians to put the country first and their own fiscal interests behind the
needs of the country and focus on the math. Our window to turn our problems around is at the
tipping point and if not addressed next year, will impact the quality of life in the U.S. for a
generation or longer.

Signing Off,
John C. Botdorf
BOTDORFRESEARCH.COM