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Gold’s Defiance Of Real Yields Can’t Last Unless Trouble Brewing

Gold’s Defiance Of Real Yields Can’t Last Unless Trouble Brewing

By Garfield Reynolds, Bloomberg markets live reporter and strategist

Gold’s…

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Gold's Defiance Of Real Yields Can't Last Unless Trouble Brewing

By Garfield Reynolds, Bloomberg markets live reporter and strategist

Gold’s surge to record highs is extraordinary — coming as it does in the face of elevated real yields that would normally bring it crashing down. That signals the metal is likely to rapidly reverse this year’s climb, unless risk assets collapse because of an economic or financial crisis.

The 10-year real yield is still around 2%, a level unseen since 2009. That should hurt a non-interest-bearing asset like gold, but it isn’t. The previous two times before the current surge when gold hit record highs were times of negative real yields — during the pandemic and in 2011-12 as Europe’s sovereign debt woes followed on the heels of the global financial crisis.

Back before the introduction of TIPS allowed the ready tracking of market expectations for real rates, the precious metal’s ascent to a record in 1980 came when 10-year nominal yields were well below the inflation rate.

That makes gold’s rally this year vulnerable, though it may also signal investors are becoming worried that major turmoil is coming. The surge that peaked in 2011 blew past gold’s 1980 high at the start of 2008, well before the collapse of Lehman Brothers.

It’s possible the real boon for the yellow metal is negative sentiment, rather than negative real yields.

Tyler Durden Thu, 04/04/2024 - 07:20

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The Great Escape From Government Schools

The Great Escape From Government Schools

Authored by Jim Bovard via The Libertarian Institute,

After enduring bullshit school shutdowns during…

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The Great Escape From Government Schools

Authored by Jim Bovard via The Libertarian Institute,

After enduring bullshit school shutdowns during the COVID pandemic, many students concluded that school itself must be bullshit and have skipped attending classes. Government bureaucrats are panicking since subsidies are tied to the number of students’ butts in chairs each day. Duke University Professor Katie Rosanbalm lamented that, thanks to the pandemic, "Our relationship with school became optional."

School absences have "exploded" almost everywhere, according to a New York Times report last week. Chronic absenteeism has almost doubled amongst public school students, rising from 15% pre-pandemic to 26% currently. Compulsory attendance laws are getting trampled far and wide.

The New York Times suggested that “something fundamental has shifted in American childhood and the culture of school, in ways that may be long lasting.” Connecticut Education Commissioner Charlene M. Russell-Tucker commented, “There is a sense of: ‘If I don’t show up, would people even miss the fact that I’m not there?'” The arbitrary, counterproductive school shutdowns destroyed the trust that many families had in the government education system.

The New York Times reflected the tizzy afflicting education bureaucrats across the land: “Students can’t learn if they aren’t in school.”

Like hell.

So kids are not enduring daily indoctrination to doubt their own genders? So kids’ heads are not being dunked into the latest social justice buckets of fear, loathing, and guilt? So kids are not being drilled with faulty methods of learning mathematics to satisfy the latest Common Core catechism and vainly try to close the “achievement gap”? A shortage of indoctrination is not the same as a shortfall of education.

More than seventy years ago, University of Chicago President Robert Hutchins aptly observed, “The tremendous waste of time in the American education system must result from the fact that there is so much time to waste.” John Taylor Gatto, New York’s Teacher of the Year of 1991 (according to the New York State Education Department), observed, “Government schooling…kills the family by monopolizing the best times of childhood and by teaching disrespect for home and parents.”

My view on school absenteeism is shaped by my dissident tendencies. Government schooling was the most brain deadening experience in my life. Early in elementary school, I relished reading even more than peanut butter. But I was obliged to put down books and listen to teachers, slowing my mental intake by 80% or 90%. By the time I reached fourth grade, my curiosity was fading.

Between my junior and senior years in high school, I lazed away a summer on the payroll of the Virginia Highway Department. I came to recognize that public schools were permeated by the same “Highway Department ethos.” Teachers leaned on badly-written textbooks instead of shovels. Going through the motions and staying awake until quitting time was all that mattered. Learning became equated with drudgery and submission to bored taskmasters with chalk and erasers.

And then came the wooden stakes hammered home in English classes. Devoting two months to dissecting Hamlet made me damn all Danes, courtiers, and psychoanalysts. The week spent on Mark Twain’s “The Celebrated Jumping Frog of Calaveras County” story made me lust to cast all frogs and folksy nineteenth century authors into hell. The six weeks blighted by Paradise Lost convinced me Samuel Johnson was right: “None ever wished it longer than it is.” Old books, rather than sources of wisdom and inspiration, were mental castor oil—something to forcibly imbibe solely to emit the right answers on the exams.

I spent years mentally idling while teachers droned. As long as the government provided a seat in a classroom, it had fulfilled its obligations. There was never any inkling that later in life, I would need to mobilize every iota of talent I might possess. My brain was like the mythical village of Brigadoon. It showed up once every year or two to take a scholastic aptitude test and then vanished into the mists. Teachers chronically noted on my permanent record “not performing up to potential.” Mysteries never cease. As long as I didn’t fail a grade, I slipped under the radar.

I was never a chronic truant until my family moved to a college town just before the start of my senior year in high school. I missed practically as many classes as I attended that year, scampering over to the nearby Virginia Tech campus. I scrupulously avoided going to a notorious bar—only two blocks away—during school hours. Actually, this was more expediency than principle, since the happy hour with 10-cent beer didn’t commence until after the last class finished.

After my class absences reached a certain threshold, I was sent to the school counselor—a  perfectly coifed 30ish guy with an air of rectitude thick enough to cut with a knife.

He asked why I was skipping out, and I said school was mostly bunk. If I could pass classes without enduring Chinese-water-torture monotony, why stick around?

The counselor declared my attitude unacceptable and urged me to “get involved with the student government to try to fix things.” So I should fizzle away my time propping up the equivalent of the Vichy regime in Nazi-occupied France?!? Paul McCartney’s “Band on the Run” line, “Stuck inside these four walls, sent inside forever,” echoed in my head. When misbehaving kids were compelled to stay after school, it was called “detention.” But the entire system was detention, especially for the final year or two.

Boredom vanished from my life almost completely on the day I graduated from high school. My mental vitality surged after I no longer lost the bulk of my days fulfilling “seat time” requirements. Week by week, I began to regain the love of reading that I had lost years earlier.  That made all the difference for my life and writing.

I recognize that many (if not most) of the new chronically absent students are probably putting their free time to good use. But at least teenagers have the chance to discover new books and to awaken their minds in a way that would never occur locked in classrooms. One epiphany is worth a dozen regurgitated exams.

Maybe if politicians ceased treating kids’ minds like disposable resources, more young folks would voluntarily show up for school. But generations of young kids have been sacrificed for whatever fad sweeps political and education activists. The best solution is to enable as many children as possible to exit government schools as soon as possible.

Tyler Durden Wed, 04/03/2024 - 23:40

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New Report Details Horrifying Cost Of Fauci’s Failures

New Report Details Horrifying Cost Of Fauci’s Failures

Authored by Ian Miller via The Brownstone Institute,

In the post-pandemic period of…

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New Report Details Horrifying Cost Of Fauci's Failures

Authored by Ian Miller via The Brownstone Institute,

In the post-pandemic period of Covid, there’s now a concerted effort to comprehend and explain the damage that was caused by our capitulating to the hysterical overreaction and overreach of the ‘experts.’ There’s a long list of policy failures to examine; mask mandates were a disaster that accomplished absolute nothing of value, but instead led to tremendous harms, many of which continue today.

Children were forced into masks for years on end, millions of people still wear masks when traveling or inside stores and restaurants, permanently convinced of the deliberate falsehood that masks are effective prevention tools. Perhaps most disturbing is that healthcare workers in blue cities are often still required to mask. Some hospitals have required masking continuously since 2020, while others are now enforcing rolling mandates based on the delusions of administrators and expert authorities.

Research into the economic cost of many of our Covid policies and mandates is still ongoing, but a new, extremely detailed report on school closures has created a horrifying context for just how damaging Anthony Fauci’s advocacy was during the pandemic.

WASHINGTON, DC – MAY 17: Director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci testifies during the Senate Appropriations Subcommittee. (Photo by Shawn Thew-Pool/Getty Images)

All of Our Covid Policies Failed

The research begins with an obvious acknowledgment of the failures which occurred due to Covid mandates. Despite wildly different policies, there was virtually no difference in outcomes between countries.

“From the available evidence, it is difficult to identify the specific responses to the pandemic that led to better outcomes,” they write. “Countries clearly responded to the challenges in very different ways, from essentially no school closures (Sweden) to multiple years of closures (Uganda and Indonesia). Yet, simple statistics such as the length of school closures or overall health policies cannot explain much of the variance in outcomes.”

Lockdowns, mask mandates, vaccine passports…none of it mattered, nor does it explain the variance in outcomes between countries. Why? The obvious answer is that none of these policies had the slightest chance of preventing transmission of a highly infectious respiratory virus.

Instead, the likely explanation for variance in outcomes comes down to differences in accounting for Covid cases and deaths, underlying health and age demographics, or pre-existing immunity from exposure to similar coronaviruses, which was almost certainly the reason why countries in Asia performed much better than Western countries during the early part of the pandemic, but was conveniently ignored in favor of “experts” maintaining the wishful thinking that “mask culture” was responsible. 

Regardless of the explanation, the fact that there is no consistent factor to attribute better outcomes to is in itself an indictment of our Covid policies and mandates. If it’s impossible to define why a country did better or worse than another country, there should be no justification for continued restrictions. If only someone had told Fauci or his allies in the public health establishment in 2020-2021, but instead they forcefully criticized any opposition who understood the reality, such as Florida governor Ron DeSantis.

School Closures Caused Unimaginable Harms

The researchers spent most of their time attempting to assess the many harms caused by one of the pandemic’s most inexcusable policies: school closures. And the results of their estimates are jaw-dropping.

“Based on the available research on lifetime earnings associated with more skills, the average student in school during the pandemic will lose 5 to 6 percent of lifetime earnings,” they found. “Because a lower-skilled workforce leads to lower economic growth, the nation will lose some $31 trillion (in present value terms) during the twenty-first century. This aggregate economic loss is higher than the US GDP for one year and dwarfs the total economic losses from either the slowdown of the economy during the pandemic or from the 2008 recession.”

That’s not a misprint: $31 trillion. 

Teachers unions, Fauci, the CDC, and politicians have all ensured that the American economy will be decimated in the next century because they refused to admit they were wrong about all of it. As cost of living skyrockets thanks to rampant inflation, also caused by our incompetence and malicious, purposeful ignorance, children forced to learn under school closures will be irreparably set back, which will cost them hundreds of thousands if not millions of earned income throughout their lives.

It’s easy to suggest that maybe these harms may be erased or mitigated over time. The researchers addressed that too, yet they failed to provide much hope for the future.

“Finally, we provide a few observations about recovery from the learning losses. History suggests that these losses are likely to be permanent unless the schools become better than they were before the pandemic,” they conclude.

With wholly incompetent political activists like Randi Weingarten controlling schools, disgraceful DEI policies infiltrating every aspect of public education, the lack of acknowledgment from Fauci and other organizations that Covid mandates were a failure, and the complete ideological capture of the education system, it’s impossible to reasonably expect that schools will ever “become better than they were.”

The damage they caused is locked in – forever.

Once Again, Florida Provides the Alternative

Importantly, the results of school closures varied per region. In far-left states such as California, New York, New Jersey and Illinois, school closures persisted well into 2021. 

But Florida was one of the few states, and perhaps the only large one, to make reopening schools a priority, despite the objections of teachers unions and media outlets that attempted to label the governor as “DeathSantis.” 

And it’s going to pay off, relatively speaking. A figure presented in the research shows that Florida’s economic state loss in GDP is nearly equal to Pennsylvania, despite a population that’s nearly 75% bigger than Pennsylvania. And California’s estimated losses, roughly $1.3 trillion, are more than 116% higher than Florida, much larger than the population difference. Similarly, New York’s economic losses far exceed Florida’s, despite a smaller population.

DeSantis followed the actual science, listened to competent outside expert advisors, and as a result, when compared to other major states, Florida is set to massively benefit in the future. It is yet again another clear indictment of the blue states that chose to follow the Fauci blueprint into economic disaster.

And make no mistake, this is a disaster.

No Accountability for Failure

The researchers compared the learning loss train wreck to the 2008 recession, showing that the Covid response is responsible for substantially more damage than even that economic cycle. 

“The lopsided attention to the business-cycle losses from the 2008 recession and from the pandemic is startling once we see the comparable pandemic learning loss figures,” they wrote. “The economic losses from the loss of human capital are fully six times the total losses from the 2008 recession, which was labeled the largest recession since the Great Depression.”

This is staggering. Six times the total losses from the 2008 recession, already considered one of the worst in modern economic history. All because Fauci and his band of “experts” seized an opportunity to enforce their agenda of control onto a compliant society. And also because they refused to admit failure when many were desperately trying to expose them.

It’s an inexcusable, historic set of decisions with lasting consequences both in soft cultural terms and harder economic ones. A $31 trillion loss is the loss of GDP exclusively from school closures. That doesn’t even account for the loss of business income, the years-long setback in terms of new business, or the loss of GDP from adults who gave up on career plans or other pursuits out of despair or lack of opportunity.

The damage the “experts” caused is incalculable. But the attempts to calculate it has resulted in absolutely horrifying estimates. 

And not one of those responsible is willing to acknowledge it.

*  *  *

Republished from the author’s Substack

Tyler Durden Wed, 04/03/2024 - 17:40

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Japanese yen flirting with 152

The Japanese yen  is steady on Wednesday. In the North American session, USD/JPY is trading at 151.60 up 0.02%. Earlier today, the yen came within a whisker…

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The Japanese yen  is steady on Wednesday. In the North American session, USD/JPY is trading at 151.60 up 0.02%. Earlier today, the yen came within a whisker of the 152 line, climbing as high as 151.95.

Japanese services PMI expands

Japan’s services PMI improved to 54.1 in March, revised lower from 54.9 in the preliminary estimate. Still, this beat the February reading of 52.9 and marked a seven-month high. The services sector has now expanded for 19 straight months and has been the driver of an improving Japanese economy, as manufacturing has been struggling. With the Covid-19 pandemic finally in the rear mirror, inbound tourism has risen and stronger domestic demand has boosted business activity. The solid PMI report comes on the heels of the Bank of Japan’s Tankan survey, which indicated that confidence in the services sector surged to a 33-year high in the first quarter.

The Japanese yen continues to trade around 34-year lows against the US dollar, raising concerns that Japan’s Ministry of Finance (MOF) could intervene in the currency markets in order to prop up the Japanese currency. The MOF has so far limited its response to verbal intervention, warning that it will take “decisive steps” to stop the yen’s slide and BoJ Governor Ueda said last week that the central bank is closely watching the yen’s movement.

The Bank of Japan made a major policy shift at the March meeting when it lifted rates out of negative territory, but the markets aren’t expecting any further tightening before the fall. The BoJ stressed at the meeting that monetary policy would remain accommodative for the time being, a signal that it is no rush to raise rates.

In the US, today’s ADP employment report was stronger than expected, with a gain of 184,000 in March. This beat February’s upwardly revised reading of 155,000 and was higher than the market estimate of 148,000. The ADP report isn’t considered a reliable precursor to NFP, but investors nonetheless attach importance to the release, which comes out only two days prior to nonfarm payrolls. The markets are expecting nonfarm payrolls to drop to 200,000 in March, compared to 275,000 in February.

USD/JPY Technical

  • USD/JPY tested resistance at 151.87 earlier. Above, there is resistance at 152.39
  • There is support at 151.45 and 150.93

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