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US consumer sentiment slides; Americans changing jobs at fast pace; China excavators sales slump; Indian factories slow down; UST 10yr 1.58%, oil unchanged and gold higher; NZ$1 = 70.4 USc; TWI-5 = 74.6

Business / news
US consumer sentiment slides; Americans changing jobs at fast pace; China excavators sales slump; Indian factories slow down; UST 10yr 1.58%, oil unchanged and gold higher; NZ$1 = 70.4 USc; TWI-5 = 74.6
Tauranga City center
Tauranga City center

Here's our summary of key economic events overnight that affect New Zealand with news of a sense the global economic expansion may be slowing.

Firstly in the US, the University of Michigan's consumer sentiment for the US fell to an index of 66.8 in November of 2021 from 71.7 in October and well below market expectations of 72.4. It was the lowest reading since November 2011 due to an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation. In this survey, inflation expectations for the year-ahead edged up to 4.9% from 4.8% - higher, but actually lower than the actual inflation currently hitting the US at 6.2%.

US job openings slipped to 10.4 mln in September but well ahead of what was expected. And August's data was revised up. The 'quit' rate rose and more people (4.4 mln) resigned their positions voluntarily to move to another role than at any other time since this series started 20 years ago.

The number of ships waiting at US West Coast ports for unloading has grown to 111, 78 of them in Los Angeles. But there are signs the situation may ease as new fines for waiting for more than 5 days by importers to pick up their goods is motivating them to clear incoming cargoes which is now holding up ship unloading.

In Canada, the central bank's senior bank officer loan survey reports the easiest conditions for credit approvals in the series history for non-mortgage lending to households, and series equal-easiest condition for mortgage lending.

In China, a new equity market is opening in Beijing, to join the Shanghai, Shenzhen and Hong Kong markets.

And this year’s “Double 11” online shopping event saw sales grow at a slower pace amid regulatory tightening and as China’s overall consumption slows down. But it still hit a new record high of NZ$70 bln on the day (11/11/21), up +8.5% from last year. Almost 1.2 bln packages were sold at an average price of NZ$60. (However most platforms had much larger sales than this because they ran this promotion starting on November 1 through November 11. Over this longer period the two largest platforms sold NZ$200 bln of product. Apple alone sold about $2.5 bln in this 11/11 promotion. Fresh food including dairy products were reported as selling well too.)

Excavator sales in China plunged -30% in October from the same period last year, their biggest monthly drop this year, as real estate curbs, tighter liquidity, less infrastructure projects and the hike in raw material costs hampered demand. Exports, however, were on the rise as overseas economies make a comeback.

Indian consumer inflation rose to 4.5% in October (+5.0% in cities), a small rise from the prior month. This was higher than anticipated.

Indian industrial production data disappointed however, rising at only a +3.2% annual rate in September when it rose +12% in August. That is a fast and worrying slowdown for the world's sixth largest economy.

EU industrial production in September also disappointed, slipping slightly, although less than was forecast.

In Australia, inflation expectations rose to 4.6% in November from 3.6% in October. That is a sharper jump than the actual inflation in September of 3.0%.

And staying in Australia, Delta cases in Victoria have slipped to 1115 cases reported there yesterday. There are now 16,098 active cases in the state (another increase) and there were another 9 deaths yesterday. In NSW there were another 286 new community cases reported yesterday with 2,845 active locally acquired cases (both increases too), and they had another two deaths yesterday. Queensland is reporting two new cases. The ACT has 15 new cases. Overall in Australia, just over 82% of eligible Aussies are fully vaccinated, plus under 8% have now had only one shot so far.

The UST 10yr yield opens today at 1.58% and little-changed since this time yesterday but it is +13 bps higher than a week ago although little changed from the start of the month. The US 2-10 rate curve starts today unchanged at +105 bps. And their 1-5 curve is marginally steeper at +107 bps, while their 3m-10 year curve is also a little steeper at +152 bps. The Australian Govt ten year benchmark rate is down -3 bps at 1.79%. The China Govt ten year bond is unchanged at 2.95%. The New Zealand Govt ten year is also unchanged at 2.63%.

In equity markets, Wall Street has started their Friday session with a +0.7% gain in the S&P500 reducing the weekly loss to -0.5%. Overnight, European markets were mixed again, with Paris up +0.5% and London down -0.5%. Most closed with gains for the week, with the largest in Paris. Yesterday, Tokyo rose +1.1% (but was down -0.4% for the week), Hong Kong rose +0.3% (up +2.4% for the week) and Shanghai rose +0.2% (+1.4%). The ASX200 ended +0.8% higher (-0.2%), and the NZX50 ended down -0.9% (and down -1.3% for the week).

The price of gold will start today up +US$2 to US$1864/oz and to a new 5 month high. For the week it has risen +2.8%.

And oil prices are little-changed at just over US$79.50/bbl in the US, while the international Brent price is now just over US$81.50/bbl and a -US$1 dip over the whole week.

The Kiwi dollar opens today little-changed at 70.4 USc but that is a -1% depreciation for the week. Against the Australian dollar we are soft at 96.1 AUc. Against the euro we are firmish at 61.5 euro cents. That means our TWI-5 starts today at just on 74.6 and only -½% lower for the week.

The bitcoin price has slipped back further and is now at US$63,321 and another -2.8% retreat from this time yesterday. For the week it is +3.8% higher however. So far in November it is +3.2% higher. Volatility over the past 24 hours has moderate at just over +/-2.5%.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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56 Comments

So next week our children are going to suffer again, with around 20% of teachers not coming back to my kids' school as one example. The children have suffered more than any other group through this, their education and mental health has been compromised, all to protect other age groups, given the very low incidence of Covid-19 effects on children. The vaccine mandate for the education sector has been so poorly thought through.

What worries me is this might be taken further, as a mandate to all children (whatever age they define this as). This is effectively already happening, with venue operators coming down hard on children's end of year shows. In my case, my 12 year old will be required to be vaccinated. This despite her having the body of a 10 year old and being more suited to the reduced Pfizer vaccine for under 12s, which isn't available yet. 

I'm double vaccinated, but this treatment of our children, for no other reason than to subsidise the health of older generations, is totally unethical.

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Antivax 

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Just a concerned parent really with everybody caught up in covid hysteria. Was happy with the information available for deciding to get vaxed myself, had heaps of anti vac stuff from family members which was largely all false. And the cost to benefit stacks up if you’re an adult. But you think even more critically when you’re making that decision for somebody else.

For me, that same level of information isn’t there for kids, namely, small lab testing sample sizes, no analysis of long term effects, the exceedingly small occurrence of serious covid effects in children and again, getting a shot purely for the benefit of others. But hey, let’s use our kids as guinea pigs.

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I wish people would stop lumping all kids health together under some generic blanket. Kids health, just like adults health is not uniform. There’s tens of thousands of children in New Zealand (my son included) that have underlying health issues that would mean contracting covid would be seriously detrimental to their health. Would we have preferred to have a decade of vaccination data available before deciding to vaccinate our child? Of course, but we don’t have that luxury and like you said have to weigh up the risk to benefit ratio of a child who spent two weeks in PICU with RSV just before delta arrived on these shores. There are many other parents who will be facing the same dilemma. 

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People seek comfort in blankets. Sadly they will be of little use here. Each of us are an individual, child, adolescent, adult, senior and each of us will have their own individual reaction. For instance in the UK a relative, in 30’s, fit, tall & lean non smoker caught covid at a venue alongside a workmate who is the exact opposite. Both double vaccinated. Our chap had over a week like with a really lousy flu the other didn’t even know he had caught covid. It surely is going to be a bit of a lottery as covid plays out through our country.

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All of NZs current hospital covid cases (hundreds of people) are the unvaccinated.

5x as many positive covid tests in NZ are from the unvaccinated, despite them only making up a small percentage of the population.

It's a bit of a lottery for sure, but it needs to be strongly understood how much the odds are in all and each of our best interests if as many people as possible get vaccinated. 

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Wow 

Impressive stats... source?

Or are they just in your head

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Ministry of Health.

Correction, 100% of all new admissions are currently the unvaccinated. But it's about 22:1 unvaccinated to vaccinated for hospital admissions.

Its almost as if the strong push to vaccinate has a grounding in reality.

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I find it fascinating that you anti vaxers suddenly become experts on epidemiology, drug trials, etc.

I have little clue as to how my car works, but will happily take my Merc 100 km/h down the motorway without questioning the manufacturer’s testing or credentials. 

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Liar.

Nobody who owns a Merc has ever just driven it at 100 km/h on the motorway ;) 

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Yes guilty as charged I’m afraid. C43 was recommended as the best model by the salesman for me to deal with my mid life crisis.

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I'm not but the British Medical Journal is?

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Not anti-vax at all, I have my kids vaccinated in everything else that they're supposed to have. Also pro-fluoridation, pro-1080 etc. But I like to think I have at least rudimentary critical thinking skills. Yet we're being expected to just accept this as 'she'll be right'. Since when did questioning things like this outcast people? There's a real worry in where this is heading. And for the record, people like Sue Grey really wind me up, using people's grief for their own personal profile and benefit.

My other take on this is just what is Labour's plan here? Are they hoping this all goes away by the end of next year and then right the public perception ship in time for the 2023 election?

 

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Then perhaps it is just a simple question. Which do fear most, the affect of covid or that of the vaccine. 

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Nothing to fear but fear itself 

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Ignore the trolls. Anyone with more than a handful of brain cells know you can be both pro-vax and against vaccine mandates at the same time. Our government is trying to lump anyone who even asks a simple question on its covid strategy (assuming this exists) as a anti-vax, conspiracy theorist. With regards to Labour's plan we will get slammed by Covid next winter & the government will blame the anti-vaxers, the anit maskers and Donald trump. Thats the plan like it or lump it.

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That’s only part of the plan. What is being formulated now is the groundwork to blame GP’s for the serious cases in the community that are inevitably going to measure beyond hospital capacity. The government/MoH are to claim GP’s are equipped and able to attend as will be required when in fact they are the exact  opposite. They are flat out already with existing patients and their conditions. Nevertheless the government will dump on them regardless and wipe their hands. Believe in fact it is already underway. Will be a similar pattern,  but on a larger scale of course, to the ICU where the government is claiming extra capacity whereas those actually responsible for the work itself, are saying that that claim is utterly fallacious.

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I think you'll find mechanics are allowed to voice their opinion...

Doctors aren't.!!@!!

I have spoken in depth with two GPs, one very anti,  the other on the fence but not convinced about the need to vax kids... but they must tow the line or face disciplinary action... awesome system we are running 

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There are not many countries around the world that have jumped into vaccinating kids. The US was the first - no surprises given how entrenched Big Pharma is in Washington. The Brits for example have been far more circumspect.

The FDA recommendation on 5-11 year old Pfizer vaccination was an absolute joke. They completely failed to follow their guidance around net risk/reward calculation.

In the UK for example 25 kids have died over the pandemic - half of those with extreme health conditions. Translated into a NZ population context, you are talking about vaccinating every kid here to possibly save 1 or 2 lives. That's less than the number of child homicides in NZ since the start of this lockdown. All ignoring the side effect profile of the vaccine and definitely without knowing the long term risks on vaccinating them.

Adults can make informed choices but kids can't. Experimenting on them in NZ to save the elderly and obese is simply unconscionable.

https://www.nature.com/articles/d41586-021-01897-w

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But we aren’t talking about vaccinating all kids are we. We are talking about vaccinating the vulnerable kids of society who are already marginalized as it.

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Are you sure about that? Personally I don't trust a word that comes from this government, their track record speaks for itself.

If you feel the best course of action is to have your child vaccinated be my guest, but please respect the right of other parents not to. 

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Maybe you have the only Mercedes that NZTA let through the border that was exempt from all standards set out in NZ transport law? 

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Yes but you have a choice whether to drive your Merc 100km/hr down the motorway.

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Don't worry, you can be assured they have done the absolute best job testing these things.

Covid-19: Researcher blows the whistle on data integrity issues in Pfizer’s vaccine trial

https://www.bmj.com/content/375/bmj.n2635#

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Why on earth do you think this is a smoking gun? There were some stuff that didn't follow processes exactly which may have had an effect for a small proportion of participants in a trail. And the laxities weren't even that bad.  "Blowing the whistle" is a bit extreme, I mean really?

One photo, provided to The BMJ, showed needles discarded in a plastic biohazard bag instead of a sharps container box. Another showed vaccine packaging materials with trial participants’ identification numbers written on them left out in the open, potentially unblinding participants. Ventavia executives later questioned Jackson for taking the photos.

The BMJ that drug assignment confirmation printouts were being left in participants’ charts, accessible to blinded personnel.

a Ventavia executive identified three site staff members with whom to​​​​​​ “Go over e-diary issue/falsifying data, etc.” One of them was “verbally counseled for changing data and not noting late entry,” a note indicates.

While the falsifying data bit is bad, the rest of it is "potentially maybe might have caused some issues".  Then it sounds like saw the issues then corrected them and were audited by Pfizer, potentially with a government audit in the pipelines? And it was only for a small percentage of the full trail.... frankly am surprised there weren't more issues.

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Blobbles

Correct.

Simply a piece by a journalist based on a source who became a whistleblower only after having lost their job. And as you say, only a single instance of shoddy work of one small instance within one of over a large number (150 I think I read somewhere) different trials.

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Yeah the FDA was right on to it - exemplary work overseeing these trials - '...the agency rarely does anything other than inspect paperwork, usually months after a trial has ended. “I don’t know why they’re so afraid of them,” she said. But she said she was surprised that the agency failed to inspect Ventavia after an employee had filed a complaint. “You would think if there’s a specific and credible complaint that they would have to investigate that,” Fisher said.

In 2007 the Department of Health and Human Services’ Office of the Inspector General released a report on FDA’s oversight of clinical trials conducted between 2000 and 2005. The report found that the FDA inspected only 1% of clinical trial sites.6 Inspections carried out by the FDA’s vaccines and biologics branch have been decreasing in recent years, with just 50 conducted in the 2020 fiscal year.7

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Nothing new. It was Armistice Day, 2 days ago....

...this treatment of our children, for no other reason than to subsidise the health of older generations....

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Vaccines are the new salvation so all effort must be made to convert the unvaccinated.

But like the return of dieties a bunch of people may find themselves metaphorically standing on a hilltop in the middle of the night feeling a bit sheepish.

 

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I think you need to spend a few days in our severely under resourced hospitals to realise this is not just about protecting older generations health. As someone that is friends with a paramedic and a nurse in Auckland central’s respiratory ward our health system is already under immense strain (regardless of what our politicians tell you) and our cases have far from peaked. I think everyone will agree that our hospitals shouldn’t have come to be in such disrepair but we have to deal with what we have currently and unfortunately without extremely high vaccination rates and restrictions whilst we wait to reach those high rates everyone’s health (should they be unfortunate to require any type to hospital care  covid related or not) is at risk.

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Children are not a major risk in terms of hospitalisation or death. RSV on the other hand did kill children and at one point they had 1.5 children per 1000 in ICU (Wellington region). Nobody seemed to care about that at the time?

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Where are you getting this information from? Are you referring to NZ data in regards to covid because surely I don’t need to spell out why that analysis is flawed?

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Which part? The RSV or the Covid?

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Read above, I’m asking where are you getting your covid data regarding kids?

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You’ve chosen to focus on Nz RSV data then link a commentary on three non peer reviewed studies based on english data? Ok then

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The fatality rate in UK was 2 per million for kids. I don't give a shit how hard the health system gets hit in NZ, it's not fair to experiment on kids to paper over the failure of governments to prepare a decent system.

Care can and will be rationed if the system comes under pressure. Anyone over 70 will have to take their chances, and that's simply natural law.

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Who’s saying vaccinating all kids? Why should those children with underlying health conditions many with underlying disabilities be further marginalized from society because you don’t believe they should have the same privilege as you to be vaccinated and thus significantly reduce their likelihood of ending up in hospital? Ignorance and privilege of the highest order.

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I bet when push comes to shove and they find themselves unemployed and unemployable most of them will get themselves vaccinated. Good riddance to any that are too stupid or selfish to do it.

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In this survey, inflation expectations for the year-ahead edged up to 4.9% from 4.8% - higher, but actually lower than the actual inflation currently hitting the US at 6.2%.

Inflation expectations for five years ahead remained unchanged at 2.9%.

What Does The Rest of the Market Think About The ‘Epic’ CPI (TIPS, breakevens, even consumers themselves)

We already covered the yield curve’s reaction given today’s whopping consumer price levels. How about strictly inflation expectations in the market? TIPS, breakevens and such.

Unsurprisingly, shorter-term breakevens (5s) jumped 12 bps to a new high of 308 bps (boosted considerably following the auction on October 21st). Pulling up the rest of the inflation “curve”, the 10-year breakeven added a “mere” seven to a total of just 270 bps.

As has been the case all year, inflation expectations are inverted which is why I characterize the 10s as having been “pulled” upward with clear and visible reluctance. The market is, essentially, putting together short run consumer prices (remember, TIPS get reimbursed by the government using the CPI average) with a longer run which is being priced as nothing like those.

That’s the inversion and with today’s trading it is back at a record level. In other words, even TIPS – despite returns predicated on this very CPI – are still measuring future CPI’s as if those currently are transitory. We don’t know what that means in terms of just how long “transitory” can last, the market is increasingly certain that it won’t hold a serious impact outside of whatever generically counts as the near term.

Like the flat and low nominal yield curve, TIPS are trading consistent with the other pricing this as something other than inflation. In fact, longer run inflation expectations have barely budged even as consumer indices accelerated at unusually high rates this year (like the PCE Deflator numbers will, too).

 

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Dalio, the billionaire founder of Bridgewater Associates, has long been known for his view that there are better assets to hold than cash amid central bank money printing. In periods of rising prices, he says it’s actually more important to look at what you can buy with that money.

“When a lot of money and credit are created, they go down in value, so having more money won’t necessarily give one more wealth or buying power,” Dalio wrote, adding that real wealth becomes a function of production capacity over time. “Printing money and giving it away won’t make us wealthier if the money isn’t directed to raise productivity.”  - Link

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The allocation of bank credit creation determines what will happen to the economy - good or bad...

I owe you + you owe me + magic banking laws = Money out of thin air

 

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I thought this Bloomberg segment suggesting that Chinas population may already be falling interesting. We didn't expect this to happen until 2025 but it appears the birthrate may have dropped so much that we started a few years early.

Asian century?

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Does it matter? - 1% will own all of it.

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Let's see if NZ unemployement rate goes up after Christmas.

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There's always fruit picking and seasonal work;-) 

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An oft-repeated phrase uttered during this pandemic has been 'I back the science' or words to that effect.

When asked to elaborate on said science, there is often a longish pause followed by something like 'well I back the scientists to know the science but i don't really understand it fully myself ...'

I think there's the rub - people are putting all their faith and trust in the white coat brigade without questioning their own biases. 

I like to remind them that similar people develop weapons of mass destruction, but that is a little facetious of me I know ...

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Indeed, why weigh up the opinions of scientists and doctors when one can instead dismiss them as "the white coat brigade" and learn better to make a fully informed judgment using Facebook and YouTube. Too right.

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Ridiculous.  I suppose you know exactly how your car works, how your computer operates and if you ever need surgery, get a medical degree to understand all the possibilities before going anywhere near them?  No?

Trusting smart people from subject areas you aren't a specialist in doesn't make you stupid, it means that you participate in a society of mutual trust and respect, where you understand other people know more about you in certain subjects.   Doing the opposite (questioning everyone and everything on the basis of some perceived grand deception) is known as being delusional and paranoid. I aren't saying trust everything, feel free to give cursory analysis up to the limit of your ability. But questioning and disbelieving the vast majority of experts because of some unsubstantiated things you read off the internet makes you an idiot. It shows you neither understand how our knowledge systems work and are gullible, led by people who have ulterior motives to sew mistrust.

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There could be some good job opportunities coming up for those who are double vaxxed. Come on, gotta look at the positive side of things

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Almost a double entendre there? 

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For the first 6-8 months, maybe.  But refuse the first booster, and what then?  If not the first, the second, the third and so on ad infinitum. 

Because, finally, the vaccine is not a sterilising one: unlike MMR or Polio vaccines, it does not and cannot prevent infection from the targeted malady.....

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This is exactly where the whole thing will fall over. Still got an old pre-2000 car that needs a WOF every 6 months ? well its a total PITA. The 6 months comes round so fast you feel like your forever at a testing station. The numbers getting the booster are going to crash over the years. I can see some getting the first booster and then maybe the second but its gone from there on. Unless your fully committed to getting the boosters then there is not much point getting vaxxed in the first place.

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Hopefully my vaccine status will make up for my lack of experience and relevant skills lol I like your thinking 

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Well, in many situations I'd rather hire and upskill some inexperienced but mentally balanced individual rather than hire an experienced tinfoil-hatter who has gone down the rabbit hole of some bizarre anti-vaxx conspiracy theory.  

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