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2021-07-20 07:00 by Karl Denninger
in Market Musings , 559 references Ignore this thread
Get Out On The Bounce
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There will be one.

There always is.

About a month ago on Twatter, when Royal Caribbean "announced" they were playing "must be vexxed" I said get the **** out of all the cruise stocks.  They were very close to their rebound highs.  I was mocked, of course, on Twatter; that day, when I posted it, they were down a couple of percent and the ha ha ha ha it's bouncing up to the close was the refrain, with one douchebag saying he was buying into it.

How's it looking now?

Well, you're missing close to a third of your investment in Carnival, to be precise.

That's a big loss.

There's a basic problem here: We went down the wrong road with Covid-19.

I've pointed this out since it started.  We had plenty of opportunity, eight months to be precise, to actually interdict the winter surge.  No, we wouldn't have saved everyone.  That's not how it works -- ever.  But we could have done a lot.  Instead we had the Democrats and public health officials praising various political "protests", which were mass-events, while telling everyone else to******their pants, hide under the bed and that masks were better than vaccines.  Obviously they didn't believe their own bull****.

Then it was jabs.  Believe they work or not, your choice.  The CDC and NIH claim they do.  Fine.  I don't care if you believe it or not and this isn't the thread to debate it.

But if you believe it works then it doesn't matter if I took a jab or not, as you're safe.

So why the screaming?

We all know the answer: You fear you may have ****ed up so you want everyone else to drink the KoolAid too.  That way if it turns out you did it's not just you who takes the dirt nap; a bunch of others go with you.

That's very Christian of you, isn't it?

Oh, just asking -- how's that work out for the zombies?  Not so good, right?

Well, economically there's a problem with all this whether you're a zombie or not.  Fearful people don't create jobs, do they?  They run up their credit cards and buy houses at crazy inflated prices because, well, YOLO and they don't expect to be around tomorrow.  Who gives a crap about the statement with a "Please pay this amount" line on it?

Meanwhile Biden and Company have good vibes coming from what Trump did -- blowing a crazy amount of money on trying to prop up a dead economy -- one he, personally, killed by being a bed-wetter himself.  After all, people pissing their pants hiding under the bed don't make for a vibrant anything, except sales of laundry detergent and carpet shampoo.  So give 'em the money, let 'em smoke bongs -- oh, wait, now they don't want to come back to work.

That's a problem, right?

Worse, we know from previous downturns that when people leave the workforce and go on the dole, as with SSDI, they don't come off.  Ever.  A very large percentage never return to any work at all, say much less anything like their former position and salary.  That's how it is.  We've seen it repeatedly -- in 2000, in 2008, and now..... will it be different?  Probably not.

Yeah, I know, Zoom is doing great.  So is Spamazon and a few others.  I get it.  "Money has go somewhere."

Well, true, except for one problem: After original issue at an IPO for every buyer there is seller who thinks the buyer is full of crap.  One of them is wrong.  It's easy to think you're right for a while -- but are you really?  Or did you buy a pig in a poke?

If you buy a stock at $300 and it goes to $50 someone else didn't make (and thus can't spend) the $250 that disappeared while you held it screaming down the chute -- it's gone.

Inflation is very simple when you get down to it, and so is The Fed.  The Fed cannot commit a single dollar of QE nor cause a dollar worth of inflation without Congress spending what they don't have.  It's basic mathematics; to commit QE they must buy Treasuries.  To buy them Congress has to cause Treasury to issue them.  In every case that happens because Congress does not first tax what it spends.

Never mind things like setting the reserve rate to zero.  Which Congress specifically authorized, I might remind youafter Hanky Panky had his first failed attempt at $700 billion.  The second included a one-sentence change in the law permitted Bernanke to set the reserve rate to zero.  I reported on it at the time and pointed out that Congress permitted infinite leverage which, if abused, would blow up the government, the economy and you.

Congress passed it, Bush signed it.

You did nothing about it despite it being a clear declaration of intent to steal literally everything.

That was more than a decade ago and you still haven't done crap about it.

The Federal Reserve was created by Congress, via a law.  A real law.  A law that says their mandate is for stable prices.  Not 2% inflation, not "somewhat hot", stable.  That's the law.  The Fed has violated it for 100+ years, serially and daily.  Congress has refused to put an "or else" in said law for that length of time.  Why?  Because Congress like this.

In 2008 The Fed broke the law again.  The Federal Reserve Act forbids The Fed to buy or transact in anything that does not have a federal guarantee.  May I ask if this has a federal guarantee?

 

When did I write about this?  September 6th, 2009.

What did Congress do about The Fed buying this paper, which was clearly unlawful?

Congress retroactively gave it a backstop.

The next person who tells me that The Fed is an evil empire is going to take a load in each eye socket from me.

Congress is responsible for every single bit of this and that, my friends means we are responsible because we put Congress there, we allow them to continue to infest Washington DC and we are the reason this is going to blow up -- again.

The curtains are on fire.

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Radiosity
Posts: 698
Incept: 2009-03-05

Sunny UK
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"despite it being a clear declaration of intent to steal literally everything."

You will own nothing and be happy. Just sayin'.

Also, the curtains are on fire? No... I believe the curtains are just a pile of ash and blackened threads. We're at the 'carpet is on fire' stage now. And probably the furniture too. And maybe the dog.
Silverspur
Posts: 7
Incept: 2021-06-19

Pahrump Nevada
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For the last couple months on my daybreak hike I've seen a fellow hiker in the distance across the desert South of my home. Well our paths crossed the other day. A California 'refugee' as we call them in this area. He bought a home here in rural Nevada to escape the high taxes,crime and mismanagement of California politics. As he spoke it was obvious we of totally different political philosophies with me being independent conservative libertarian minded individual. Surprising he also identified as a independent. However he was brainwashed with the need for compassion, the humanity, the need for understanding, the less fortunate on and on. The need for the Government to support them all regardless as to their place in society. Well I worked all my life, did filthy jobs others would not do get ahead. So I have minimal compassion for those who chose not to work strive for success etc.

However this refugee said his biggest fear is that we are quickly sliding toward a Marxist future. I thought to myself, here was this stranger in the desert supporting the policies that are enabling this Marxist agenda which is taking place at this time. Believing one thing but fearing the consequences of these policies. It just baffles me....
Invisiblesun
Posts: 208
Incept: 2020-04-08

Maryland
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How do you get a population to comprehend they are living a lie? That is the challenge. That is the hurdle that must be cleared.

The enemies of truth are deliberate in protecting the lie. They censor, cancel and punish truth telling. The price they put on the truth is not very high at all for those who value truth. But for those who are indoctrinated to "trust the experts" the cost to them of challenging the establishment is too high. But they must be reached! Their minds must be enlightened.

A society that embraces superstition and ignores what is real will fail. Such a people will collapse into emotional and spiritual sickness and real poverty will follow. No person will be safe from the depravity that pervades a society that willfully turns its back to truth & wisdom.
Fumei
Posts: 2327
Incept: 2019-01-08

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Compassion would be to go into the desert, dig a hole, fill said hole with a suitable biped, and then bury it.
Bluto
Posts: 63
Incept: 2021-07-10

Florida
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Those clowns made the decision to print money in response to the China virus, just like with previous so-called "crises". The volume created this time just might be enough to overdose the patient. Here are just a few examples I have personally encountered, 100% caused the the reaction to the China virus:

- I am reading where social security payments will increase 6% next year. How are people who are lucky to get 3% raises at work going to feel about that? Especially when the social security wage base will also increase substantially (i.e., higher taxes on upper middle class earners). Think that may persuade more people to say "screw it" and retire? LOL

- A couple of places I have booked previously on VRBO have increased 50% year-over-year. 50%!

- I went grocery shopping recently and was looking at the packaged cheese. 8 ounces of mozzeralla, but only 7 ounce packages for other types of cheese. Same prices though. And I noticed a new product: "ultra-thin" cheddar slides. But not 7 ounces. 6.8! ounces. Was the price correspondingly less? What do you think? LOL

- Companies are getting killed by shipping costs. I am aware of one case where they budgeted X to ship some large items from overseas. Now, it is costing them more than 3X. 200% inflation!

This isn't going to end well. Our so-called "leaders" lack the moral integrity, fortitude, or even intellect, to do the right thing. They may even be dumb enough to try price controls, after seeing all of the other dumb things they have done in the last year.

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You must never confuse faith that you will prevail in the end -- which you can never afford to lose -- with the discipline to confront the most brutal facts of your current reality, whatever they might be. VADM James Stockdale
Happyapricot
Posts: 48
Incept: 2019-07-06

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Bluto, I doubt people will see a raise. They will give the people 6%, but increase Medicare premiums 15%. They will giveth with one hand and taketh away with the other! SO don't worry about it.
Lazydaizy316
Posts: 99
Incept: 2016-10-21

Ontario, Kanukistan
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It's been said many times.....You can't fix stupid.

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I identify as vaccinated.
God is great!
Beer is good!
And people are stupid!
Cmoledor
Posts: 128
Incept: 2021-04-13

Akron Ohio
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As always, the truth is written in these pages. Im on the **** EVERYTHING train. Its too late to save. We dont deserve to be saved either. Unless Im just in a dark place right now.

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The whole world is one big ****ing scam
Why are you giving a vulgarity warning here? Our genial host is an advocate of both skull****ing and sodomy via rusty chainsaw. Credit to Rollformer
Calrissian
Posts: 22
Incept: 2021-04-12

London, UK
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Re: the curtains are on fire.

There are still curtains?
--
ps. when the ship goes down...you better be ready!
Kgmqt
Posts: 199
Incept: 2013-08-19

Minnesota
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Quote:
But if you believe it works then it doesn't matter if I took a jab or not, as you're safe.


100% my biggest issue with the whole thing. The get the vax message has infiltrated so many mediums and the message has become so twisted. About 75% of those I interact with have not been vaccinated. The other 25% have all been pretty good about not forcing it, but there are some on the fringe that treat me like I have open sores or something. When I have an actual discussion about it they usually say 'I thought you were a science guy' and my response is yes, that is exactly why I am not getting it. They think that because they hear Fauci say it is good they all jump on, but there is so much not being said in the media and the 'science' doesn't add up. They have been mostly removed from my interactions.

If I don't want the jab just leave me alone.

Quote:
need for compassion, the humanity, the need for understanding, the less fortunate on and on.


OK - I actually agree with this. There are a lot of people that need help, and there are ways outside of the government to help them. Often times it does not involve direct $$$, but might just be a little time.

Quote:
The need for the Government to support them all regardless as to their place in society.


And completely disagree with this. I also worked a lot of filthy jobs. Grew up on a farm literally shoveling ****. Days when you had to take a hose shower outside before you could go in the house to take a real shower. Everything that my wife and I have we worked for. Nothing was given to us.

But we keep incentivizing the lazy. Print more money, flood the welfare programs.





Whitehat
Posts: 5421
Incept: 2017-06-27

Elsewhere
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Silverspur wrote..
However he was brainwashed with the need for compassion, the humanity, the need for understanding, the less fortunate on and on. The need for the Government to support them all regardless as to their place in society. Well I worked all my life, did filthy jobs others would not do get ahead. So I have minimal compassion for those who chose not to work strive for success etc.

However this refugee said his biggest fear is that we are quickly sliding toward a Marxist future. I thought to myself, here was this stranger in the desert supporting the policies that are enabling this Marxist agenda which is taking place at this time. Believing one thing but fearing the consequences of these policies. It just baffles me....

the problem is that we people busted our asses and kept the system going for these policies to be implemented on our backs. There is no easy solution as we are doing what we are.

This person whom you describe can have these conflicting notions since he is isolated from the consequences of his actions due to said system.

It might have been an opportunity to ask him if things are so bad from whence he comes, why did he not stay and fix them. Not in a nasty way at all, just opening a thought sharing process.

One could further share that many like us who believe in helping the less fortunate prefer to do so hands on, with more result control and without perpetuating the misery and allowing others to make a business out of it.

As an aside, i have looked at a few rentals in Pahrump, Nevada for my relocation. Either way, plan on touring the area in my travels.

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smiley

"Better to reign in Hell, than serve in Heaven," Satan's monologue in the first book of John Milton's Paradise Lost
Jw1234
Posts: 4
Incept: 2020-03-25

Clownworld
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MT is my daily sanctuary from the BS, and has been for 9-10 years.
Always interesting and thought-provoking.

Thank you KD, and posters, thank you.
Dissenter
Posts: 89
Incept: 2021-05-30

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@Tickerguy--well said!

"But if you believe it works then it doesn't matter if I took a jab or not, as you're safe.

So why the screaming?

We all know the answer: You fear you may have ****ed up so you want everyone else to drink the KoolAid too. That way if it turns out you did it's not just you who takes the dirt nap; a bunch of others go with you."
Omegapoint
Posts: 56
Incept: 2020-12-26

San Diego
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Quote:
About a month ago on Twatter, when Royal Caribbean "announced" they were playing "must be vexxed"


Great business model and even better for the entire economy. Yes, let's purposely not conduct business with up to 50% of the population. What are they thinking...?

This will work great at destroying the economy and society. Not to mention, the development of a parallel economy and society that only caters to the unvaccinated. If we go down this path, the country will fracture apart into separate countries. Beware of unintended consequences.
Memeticdefense
Posts: 40
Incept: 2018-03-26

Las Vegas
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The Reddit silver apes have an easy solution in response to the evil Fed that is destroying our currency. They are going to squeeze silver to unimaginable heights and become fabulously rich.

Regardless of what happens to the price of silver, I'd like to hand the dumbest investor award to the Reddit silver apes for all of the following reasons. Their discussion group rewards the most superficial posts with their voting system, so unless you say something stupid like, I'll buy an ounce of silver for every upvote I get, your comments will remain unread.

They made two noteworthy attempts to drive up the price of silver this year, timed in the absolute worst possible way. First, the buying occurred after the price of silver had already doubled and was ready to give back at least some of the gains based on technicals, speculative positioning, momentum, and seasonality. But more importantly, they all tried to buy physical silver at once, driving the premiums to over 20%. This made physical silver the dumbest of all investments because with what other investment do you lose 20% as soon as you make the purchase? (Bullion dealers rarely pay more than spot for your metal, even with high premiums and the average guy on the street doesn't even recognize what precious metals are, so you can't sell to them, either.) Maybe when buying a new car or a new dress you take a bigger loss as soon as you make a purchase? But nobody even considers those to be investments.

The easy alternative, of course, is to buy the ETF to lock in the price of silver, wait for the premiums to come down, and then sell the ETF and buy physical silver when the premiums are lower. Only the fear the that a total collapse of the financial system is imminent could justify buying silver at high premiums. Mints are reluctant to add capacity because investor silver demand is notoriously short-lived. In the worst case, investor demand remains persistently high and then when more capacity is added, premiums come down later. They've already dropped from roughly 20% to 12%.

It's hard to think of another investment that is dominated by so many irrational salesmen and blind believers of those salesmen. The irony is that if they had picked any rare metal other than gold, silver, or platinum, the squeeze would have been a spectacular success. Almost every rare metal has rocketed higher. Palladium has quintupled in price in less than five years. Rhodium has gone up fifty-fold in less than 5 years (peak to trough). Iridium and ruthenium are way up. These metals have gone up primarily due to industrial demand alone, so any material investor participation would have resulted in a true moonshot.

The whole premise of the squeeze is that paper contracts artificially reduce the price of precious metals when the commitment of traders report clearly shows that the opposite is true. Speculators buy using leverage to artificially inflate the price of silver and when they unwind their bets, the price of silver crashes. Yet every price decline is blamed on evil manipulators such as JP Morgan and anyone who disagrees with this narrative is treated like a heretic.

One of the unique aspects of pure precious metals is that anyone with a grasp of some basic physics can quickly and inexpensively test the metals for authenticity. You don't need to rely on an expert telling you so. Yet the average silver ape seems to rely either on faith or opts for the most expensive ways of testing the metals (they've driven up the price of a Sigma Metalytics precious metals verifier to over $1000).

They're all supposed to be somehow rebelling against our spendthrift government, yet the most popular silver coin is the silver eagle produced by the US Mint, which has a face value of $1. Why would I pay over $30 for a coin that our corrupt government says is worth $1? I'm not even trying to be sarcastic. I really want to know. I though they'd be boycotting any money produced by the US government. I haven't found anyone who is able to provide any explanation at all.
Dissenter
Posts: 89
Incept: 2021-05-30

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@Cmoledor--you're not alone. Yeah its a dark place, but you cant deny its night time because you want the dawn. Youre not alone by any means.

@kgmqt--'thought you were a science guy' is the new 'racist' pejorative. The response should be, 'no I'm a data guy'. Science is concerned with what is demostrably true, so show me the data and lets have a discussion about data integrity'.

Its not even about "facts" or fact checking--its not a fact until the data is vetted. Facts are a retroactive function because they are based on vetted data.
Henryfrapp
Posts: 44
Incept: 2008-02-26

Stuart, Florida
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"despite it being a clear declaration of intent to steal literally everything."

Exactly! While the CONgress critters get their sliver of the take, who is the one gaining control of all the assets/"everything"?

Very very rarely do I watch MSM, but, happened to turn on CNBS and watch Jerome Powell on March 23rd, 2020 effectively say, "We are talking over the country and there is nothing you can do about it.". While enraged, I said to the peeps, the bottom is in, get long...get long NOW. The asset transfer that followed has been stunning. The sucking sound of stimmy checks flooding into broker accounts to effectively become another bank bail out as Apes charged into memes and paid insane option premiums was at first a cheer and then a whimper.

100% agree that we the people allow CONgress to pass the debts enabling the "money" laundering. But, who is selecting these critters? Who selects the agent provocateurs' or apparatchiks that lead the Executive Branch as after all it is the Executive's responsibility to enforce the laws and clearly the Fed is in violation of the law. Me think it is the ones that own the Fed and who are benefitting bigly from the death of the American Dream.

There is one campaign promise the provocateur keep, MAGA. He just didn't say for who he was making America great again. Now we know he damn sure didn't mean the people, but the Banksters.

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*Ich lasse mir doch nicht mein Schiff unter dem Arsch wegschieen. Feuererlaubnis!* (I'm not letting my ship get shot out from under my arse. Open fire!) Capt. Ernst Lindemann
Cmoledor
Posts: 128
Incept: 2021-04-13

Akron Ohio
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@Dissenter. Thanks. I appreciate your reassurance.

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The whole world is one big ****ing scam
Why are you giving a vulgarity warning here? Our genial host is an advocate of both skull****ing and sodomy via rusty chainsaw. Credit to Rollformer
Smacktle
Posts: 5064
Incept: 2009-01-20

Texas
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We put Congress there and we keep putting the same people over and over there. Most times only because they have an R or a D before their name. Neither party is for the "people".

IMO, the only way any of that changes is for it to fail miserably.

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They should be locked into portable toilets and set on fire...Cobra
I got the shakes,super ****ing bitchy, short tempered, and ready to crawl out of my skin...Workerbee
Txdg00
Posts: 80
Incept: 2020-08-10

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I remember the energy and work that was put into organizing the activism of 2007-2010 (from Ron Paul's campaign to the Tea Party and so many other ideologically-related groups). The groundswell of individual energy at that time made me think we actually had a chance to make meaningful change happen. I know Karl and others here were more involved than most folks, so I'm sure plenty of you know that feeling. At the time, the number of hours spent activating and organizing those activities felt like they were time well spent.

Sadly, the circumstances now don't seem to warrant similar effort. There just doesn't seem to be much energy or awareness throughout the population beyond small pockets of people like us here at the Ticker.

Whenever I try to explain the issues we're facing, I either get a blank stare or a shrug.
Superdude
Posts: 422
Incept: 2009-06-16

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Is it me or are people who have been vaccinated getting covid more?

5 TX Senators that fled got covid:
https://www.businessinsider.com/3-texas-....

Pelosi aide + others got covid:
https://www.yahoo.com/news/white-house-o....

71 at Olympics tested positive for covid:
https://apnews.com/3d7dcb39c13fabdd8cdf9....


I searched and cannot find numbers of people testing for covid after their shots. Just BS about efficiency of the vaccine. No numbers I can find, except from Israel:

https://www.deseret.com/coronavirus/2021....

If true... Means the vaccine is a placebo no?
Flappingeagle
Posts: 4143
Incept: 2011-04-14

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Dissenter said:
Quote:
lets have a discussion about data integrity


Exactly! I was just telling a colleague that I really do not know what to believe when it comes to COVID because I have lost faith in the data. For me, it all starts with the testing, how reliable and repeatable are the tests? Everything follows from there.

Flap

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Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
No sign that housing, equities, or farmland are in a bubble- Yellen 11/14/13
Trying to leave the Rat Race to the rats...
Chemman
Posts: 14
Incept: 2021-05-03

Concho Arizona
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At this point we are beyond the curtains being on fire. The barn has burned down and the only thing left standing is the barn doors which are wide open
Redjack
Posts: 608
Incept: 2018-01-29

Iowa
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To vax or not vax brings out the full on crazy in people.

If the vax works as they said it should (not the actual science, but the blond on TV says it should), then it does not matter to the vaxed if I do not have it.

It MAY matter to someone who medically can't take it.

However, vaccines are a sort of cult. Even before the vid we had friends who refused to talk to use because my kids got their shots, and some who cut us out because I would not give my kid an HPV shot (long story). It wasn't about the shot, or science, but about social grouping.

Hell, we had an outbreak of measles here 10 years ago. Now, being in the center of the Chiropractic world, we have a large number of people who refuse the shots. But all kids (who were in the same preschool in town) who had it, had the shots.

County board of health hid that report because it cause so much crazy it wasn't worth it.

Get a jab or not. Not my business. It is yours. Be free. That means risk.
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