Protests in China Continue Over Medication of Kindergarteners Without Parental Consent

hello, nurseEarlier this month, the Chinese government

ordered
a nationwide investigation into allegations that
kindergarten schools in several provinces were treating their
students with anti-viral medication. Authorities say the dispensing
of medication could be part of an effort to boost attendance, which
is apparently tied to revenue at the schools. The ‘president’ of at
least one kindergarten school that spurred the investigation
admitted to dosing students with over-the-counter anti-fever meds
as well as vitamins. Protests
continued this week
amid revelations that kindergartens in yet
another province may have been medicated without parents’ consent.
According to lawyers for the parents involved, there are
no laws
prohibiting administering medication to students
without parental consent, something parents and their attorneys say
they want to see as a result of the crisis.

Even while admitting official statistics show 91 percent of
kindergartens in one province as “private,” the state media agency
Xinhua has used the crisis to
attack private schools
:

The official statistics show that Guangxi has 7,554
kindergartens, 6,900 of which are private. Of these, 4,000 plus are
operating without licenses. With poor infrastructure, unqualified
teachers and shortcuts on safety, many private kindergartens are
nothing more that sources of profit for their owners and wholly
neglect their fundamental function as educational institutions,
Yuan said.

The number of unlicensed private kindergartens seems to be a direct
result of a lack of alternatives in preschool education. “The
authorities did not expect so many preschool children decades ago.
They failed to make a long-term plan for expansion of
kindergartens,” said Xiong Bingqi, deputy head of the 21st Century
Education Research Institute.

Exactly how private the schools in a nominally communist country
really are is difficult to ascertain, and there is no specific
reporting on the public/private identification of each of the
schools accused of medicating their students. Tying revenue to
attendance isn’t common among private schools in the West, and
doesn’t seem like it would be a smart arrangement in Chinese
private schools either. Schools need the ability to budget on a
year-to-year basis based on expected tuition revenue. It doesn’t
make business sense to tie that revenue to student attendance,
because most of the underlying costs of educating that student
don’t appreciably decrease with lower attendance. Yet what makes
sense in a private school in China could be very different because
of the way the government constricts and distorts whatever private
education market might exist there.

Tying attendance to revenue sounds a lot more like a strategy
that would be deployed in
government-funded schools
, where the government could point to
high attendance rates as a success. Nevertheless, the South
China Morning Post
comes closest to explaining the phenomenon
by reporting that at nursery schools “absent pupils don’t pay
fees.”

According to the blog Dongbei Daishu, private schools in

China re-emerged in 1992
, having been obliterated after the
communists took over in 1949. 

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Obama Criticizes Russia in Brussels Speech

Today President Obama gave a
speech
in Brussels addressing America’s relationship with
Europe and the ongoing crisis in Ukraine.

Early on Obama highlighted the fact that the Enlightenment,
which began in Europe, gave rise to the ideas that inspired the
American revolution. Obama then went on to say that in many ways
the history of 20th century Europe represented the struggle between
Enlightenment ideals and “an older, more traditional view of power”
which “argues that ordinary men and women are too small-minded to
govern their own affairs, that order and progress can only come
when individuals surrender their rights to an all-powerful
sovereign.”

Obama made sure to point out that this ideological struggle
continues today and that “we are confronted with the belief among
some that bigger nations can bully smaller ones to get their
way.”

Obama also said that the U.S. and its European allies would
expand sanctions on Russia if “Russian leadership stays on its
current course.”

Interestingly, Obama pushed back against accusations of
hypocrisy relating to America’s stance on the Russian invasion of
Crimea:

Moreover, Russia has pointed to America’s decision to go into
Iraq as an example of Western hypocrisy. Now, it is true that the
Iraq war was a subject of vigorous debate, not just around the
world but in the United States, as well. I participated in that
debate, and I opposed our military intervention there.

But even in Iraq, America sought to work within the
international system. We did not claim or annex Iraq’s territory.
We did not grab its resources for our own gain. Instead, we ended
our war and left Iraq to its people in a fully sovereign Iraqi
state that can make decisions about its own future.

Perhaps unsurprisingly, Obama chose not to mention that he was
opposed
to the scheduled withdrawal of American troops from
Iraq in December 2011.

Obama is right that the U.S. sought to “work within the
international system” ahead of the invasion of Iraq, although it
didn’t get the level of international approval it sought. In fact,
former Secretary General of the United Nations Kofi Annan said that
the war was
illegal
.

Obama also had something to say to non-interventionists:

There will always be voices who say that what happens in the
wider world is not our concern nor our responsibility. But we must
never forget that we are heirs to a struggle for freedom. Our
democracy, our individual opportunity only exist because those who
came before us had the wisdom and the courage to recognize that
ideals will only endure if we see our self-interest in the success
of other peoples and other nations.

Obama went on to say that there isn’t a military option in
Ukraine. Of course, without a military optionf the U.S. is left
with little else except sanctions (which are
unlikely to work
) and tools of an overly involved foreign
policy.

What the U.S. could do, and what would improve the lives of
Ukrainians and Russians, is
open

the borders
. However, Obama has demonstrated throughout his
presidency that he approves of the U.S. being involved in the
affairs of other countries and is
no fan of open borders

Watch Obama’s speech in full below:

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Elizabeth Nolan Brown on Making Birth Control Pills Available Over-the-Counter

In many parts of the world, a person can walk into a drugstore
and—without physician oversight or interference—buy a pack of birth
control pills. Perhaps several packs.  But not so in America,
where the Food and Drug Administration (FDA) has been considering
making oral contraceptives available over-the-counter (OTC) for
more than twenty years. What’s the hold up? Emergency
contraception, a more potent dose of the same hormones that make up
regular birth control pills, is now available without a
prescription. There’s no good medical justification for the
differentiation, and no reason to tie the pill to yearly doctor’s
visits. Elizabeth Nolan Brown looks at why oral contraception
in America remain stubbornly behind the pharmacy counter and behind
the times. 

View this article.

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Obama Suggests Energy Sanctions Against Russia, Bin Laden’s Son-in-Law Convicted, TSA Wants More Police: P.M. Links

  • Somebody tell Obama about Europe's history of renewable energy failures.President Barack Obama said
    today a new round of
    sanctions against Russia
    could target Russia’s energy sector as
    he urged the European Union to find new energy sources and to
    become less dependent on Russia. Bring on the fracking!
  • A jury in New York has convicted Sulaiman Abu Ghaith, a

    son-in-law of Osama bin Laden
    , of terrorism charges. The jury
    took only a day to come to a decision.
  • One employee gets killed one time at Los Angeles International
    Airport, and so the Transportation Security Administration is
    begging for
    armed law enforcement personnel
    at airport security checkpoints
    during “peak hours.”
  • The governor of Michigan says the state
    will not recognize same-sex marriages
    performed over the
    weekend. The weddings took place between a judge’s decision on
    Friday that the state’s ban on same-sex marriage recognition was
    unconstitutional and a stay put in place this week while the courts
    review the ruling.
  • The death toll in anti-government protests in
    economically ravaged Venezuela
    is up to 32. President Nicolas
    Maduro has arrested three air force generals, accusing them of
    conspiring against his government.
  • A Turkish court has blocked its prime minister’s efforts to
    block citizens’
    access and use of Twitter
    , which has been a tool to pass along
    recordings suggesting government corruption.

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content.

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Meet the Calif. State Senator Destined to Be Parodied in the Next Grand Theft Auto Game

Possibly speaking from experience?Maybe political embarrassment
comes in threes? Oh who am I kidding? As if politicians feel
embarrassment.

Anyway, a third Democratic state senator in California in recent
months has been charged with crimes. Leland Yee, who represents the
San Francisco area in the state Senate, and is running for
Secretary of State, has been indicted for public corruption as part
of a massive Federal Bureau of Investigation (FBI) operation in the
city.

Details are still sketchy, as there’s a series of raids going on
in the area today connected this investigation. The San Jose
Mercury News

notes
that Raymond “Shrimp Boy” Chow, a well-known gangster in
the city, was also caught up in the raids. They provide his
background:

Federal law enforcement officials have been chasing Raymond
“Shrimp Boy” Chow for decades, branding him one of the longtime Bay
Area leaders of a Hong Kong-based criminal syndicate called the Wo
Hop To. Chow’s criminal rap sheet dates back to 1978, and includes
multiple federal racketeering indictments that have included
allegations of attempted murder, murder-for-hire, gun trafficking
and other crimes.

Chow was originally indicted in a federal racketeering probe
that targeted the alleged leader of the Chinatown gang, Peter
Chong. At one point, Chow cooperated with federal law enforcement
officials against Chong, who had fled to Hong Kong after being
indicted on racketeering charges but was later extradited and
eventually convicted in San Francisco federal court in a case
marred by setbacks and delays. Chow’s original 1995 sentence of 24
years was lessened to 11 years as a result of his cooperation, and
he has been out of prison for the past 10 years.

That Yee might possibly be connected to organized crime drew the
eye of tech site ArsTechnica and other gaming sites. Lee, it turns
out, was a major force behind the law to criminalize the sale of
violent video games to children, a law that was ultimately struck
down by the Supreme Court as unconstitutional in 2011. The site
notes
some of Yee’s quotes
on protecting children from pretend
gangsters and animated violence:

Through it all, Yee remained a staunch defender of the idea that
the state should aid parents in making violent games harder for
children to access. He has given numerous statements over the years
to that effect. “Plain and simply, the current rating system is
drastically flawed, and here is yet another reason why we need
legislation to assist parents and protect children,” Yee told
GameIndustry.biz in 2006. “This is the same technology the armed
forces use to help soldiers kill the enemy. All we’re saying is,
‘Don’t sell it to kids,'” he told The San Jose
Mercury News
in 2008. “When you fight the good fight for a
cause you know is right and just, and it’s about protecting kids,
you don’t ever regret that,” Yee told The Sacramento Bee
in 2012.

Since we don’t know what Yee’s accused of, I don’t want to rush
to directly connect him to Chow. If the FBI does accuse him of
having a direct connection to Chow as part of this corruption
indictment, we can look forward with how a game like Grand
Theft Auto
might take advantage of this apparent hypocrisy.
 

For those keeping score, the other two California state senators
(both Democrats) caught up in current crime scandals are Ron
Calderon, accused of taking bribes to pushing certain legislation,
and
Rod Wright
, who was convicted of perjury for lying about living
in his district.

Outside of California, Patrick Cannon, the mayor of Charlotte,
N.C., (also a Democrat) was
arrested today for allegedly taking bribes
.

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How the 9th Circuit Made a Terrible Supreme Court Ruling Even Worse

The U.S. Supreme Court receives around 10,000 petitions each
year from various parties seeking review of their cases. Among the
current crop of contenders, one case in particular
stands out
as worthy of the Court’s attention:
Courtney
v. Danner
.

At issue is a Washington state law granting de facto
monopoly privileges to companies providing commercial ferry
service. According to the state, entrepreneurs hoping to break into
that line of work must first obtain a government-issued certificate
of “public convenience and necessity.” Among other requirements,
applicants must show that an existing certificate holder “has not
objected to the issuance of the certificate as prayed for.” In
other words, established ferry businesses get to veto the
applications of their would-be competitors.

The results are just what you would expect. For example, at Lake
Chelan, a 55-mile long stretch of water popular with outdoor
enthusiasts, the Lake Chelan Boat Company has been the sole
certificate holder since 1929, and has repeatedly convinced the
state to keep new competitors at bay. In effect, the company enjoys
a state-sanctioned monopoly that comes at the expense of both other
businesses and the recreation-seeking public.

In 2011, the entrepreneurs James and Clifford Courtney,
represented by the Institute for Justice, challenged the
monopolistic law in federal court, arguing it violated the 14th
Amendment, which reads: “No State shall make or enforce any law
which shall abridge the privileges or immunities of citizens of the
United States.” As support for their argument, the Courtneys cited
the Supreme Court’s 1873 decision in
The Slaughter-House Cases
, which recognized the “right
to use the navigable waters of the United States” among the
privileges or immunities of national citizenship. To be clear, the
Courtneys take no issue with any health or safety regulations; they
seek only to invalidate the monopoly law.

Yet the U.S. Court of Appeals for the 9th Circuit
ruled
against them, arguing that because the Courtneys sought
to engage in “an activity driven by economic concerns,” they
deserved no judicial protection. In fact, the 9th Circuit ruled,
neither Slaughter-House nor the Privileges or Immunities
Clause should offer any meaningful shield for economic liberty. “A
reasonable interpretation of the right to ‘use the navigable waters
of the United States,’ and the one we adopt,” the 9th Circuit
declared, “is that it is a right to navigate the waters of
the United States.”

That ruling transformed Slaughter-House from one of the
Supreme Court’s most regrettable opinions into something even
worse. Let me explain.

The issue before the Supreme Court back in 1873 was whether a
Louisiana law granting a private corporation an exclusive
slaughter-house monopoly for the city of New Orleans violated the
recently-ratified 14th Amendment. In its five-to-four opinion, the
Court not only upheld the monopoly, it gutted the Privileges or
Immunities Clause in the process, holding that the clause placed no
limit whatsoever on the power of the states to control the lives
and liberties of their residents. To rule otherwise, argued the
majority opinion of Justice Samuel F. Miller, would “fetter and
degrade the State governments.”

That decision turned the text and history of the 14th Amendment
on its head. As Justice Stephen Field remarked in his
Slaughter-House dissent, the Privileges or Immunities
Clause was designed to protect a broad range of fundamental rights
from state infringement, including “the right of free labor.” As
Field stressed, “the fourteenth amendment does afford such
protection, and was so intended by the Congress which framed and
the states which adopted it.”

Field got it right and the majority got it wrong. The 14th
Amendment was drafted in 1866 and ratified in 1868 in direct
response to the widespread injustices occurring throughout the
former Confederacy in the aftermath of the Civil War. Among those
injustices were the Black Codes, a web of regulations and
ordinances designed to rob the recently freed slaves of their
rights to own property, possess guns for self-defense, make
contracts, file lawsuits, earn a living, and move freely in search
of better opportunities. In Opelousas, Louisiana, for example, the
local government declared, “No negro or freedman shall be permitted
to rent or keep a house within the limits of the town under any
circumstance,” nor shall any freedman “sell, barter, or exchange
any articles of merchandise” without written permission from white
officials. Similar laws restricted the rights of the freedmen’s
white unionist allies.

All such laws plainly violated the principles of free labor and
economic liberty, and the Privileges or Immunities Clause was
designed to put a stop to the violations. Indeed, as the clause’s
author, Republican Congressman John Bingham of Ohio, once
explained, among the privileges or immunities protected by the 14th
Amendment from state infringement was “the right to work in an
honest calling and contribute by your toil in some sort to the
support of your fellowmen, and to be secure in the enjoyment of the
fruits of your toil.”

The Slaughter-House majority ignored that historical
evidence, ruling instead that the Privileges or Immunities Clause
protected only a narrow set of rights stemming from national
citizenship, such as the right to “free access to [the nation’s]
seaports, through which all operations of foreign commerce are
conducted,” and the aforementioned “right to use the navigable
waters of the United States.”

That outcome was more than bad enough. But in the Lake Chelan
case now before the Supreme Court, the 9th Circuit sunk even
further by effectively rewriting Slaughter-House to
recognize only a non-economic right to “navigate” U.S.
waters. This deficient interpretation not only runs counter to the
original meaning of the 14th Amendment, it violates the clear
meaning of the (abysmal) Slaughter-House precedent.

That is too much. The Supreme Court should take the case,
overrule the 9th Circuit, and restore a small bit of sanity to
America’s Privileges or Immunities Clause jurisprudence.

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Risk Expert: GMOs Could Destroy the Global Ecosystem

 Do We Have a Right to Know If Our Food Has Been Genetically Modified?

 

Risk analyst Nassim Nicholas Taleb predicted the 2008 financial crisis, by pointing out that commonly-used risk models were wrong.  Distinguished professor of risk engineering at New York University, author of best-sellers The Black Swan and Fooled by Randomness, Taleb became financially independent after the crash of 1987, and wealthy during the 2008 financial crisis.

Now, Taleb is using his statistical risk acumen to take on genetically modified organisms (GMOs).

Taleb’s conclusion:  GMOs could cause “an irreversible termination of life at some scale, which could be the planet.”

Sound crazy?

Sure it does … but only because we don’t understand statistics, and so we have no handle on what’s risky and what’s not.

Taleb and his 2 co-authors write in a new draft paper:

For nature, the “ruin” is ecocide: an irreversible termination of life at some scale, which could be the planet.

 

***

 

Genetically Modified Organisms, GMOs fall squarely under [the precautionary principle, i.e. the rule that we should err on the side of caution if something is really dangerous] not because of the harm to the consumer because of their systemic risk on the system.

 

Top-down modifications to the system (through GMOs) are categorically and statistically different from bottom up ones (regular farming, progressive tinkering with crops, etc.) There is no comparison between the tinkering of selective breeding and the top-down engineering of arbitrarily taking a gene from an organism and putting it into another. Saying that such a product is natural misses the statistical process by which things become ”natural”. [i.e. evolving over thousands of years in a natural ecosystem, or at least breeding over several generations.]

 

What people miss is that the modification of crops impacts everyone and exports the error from the local to the global. I do not wish to pay—or have my descendants pay—for errors by executives of Monsanto. We should exert the precautionary principle there—our non-naive version—simply because we would only discover errors after considerable and irreversible environmental damage.

Taleb shreds GMO-boosters – including biologists – who don’t understand basic statistics:

Calling the GMO approach “scientific” betrays a very poor—indeed warped—understanding of probabilistic payoffs and risk management.

 

***

 

It became popular to claim irrationality for GMO and other skepticism on the part of the general public —not realizing that there is in fact an ”expert problem” and such skepticism is healthy and even necessary for survival. For instance, in The Rational Animal, the author pathologize people for not accepting GMOs although ”the World Health Organization has never found evidence of ill effects” a standard confusion of evidence of absence and absence of evidence. Such a pathologizing is similar to behavioral researchers labeling hyperbolic discounting as ”irrational” when in fact it is largely the researcher who has a very narrow model and richer models make the ”irrationality” go away).

In other words, lack of knowledge of basic statistical principles leads GMO supporters astray. For example, they don’t understand the concept that “interdependence” creates  “thick tails” … leading to a “black swan” catastrophic risk event:

Fat tails result (among other things) from the interdependence of components, leading to aggregate variations becoming much more severe than individual ones. Interdependence disrupts the functioning of the central limit theorem, by which the aggregate is more stable than the sum of the parts. Whether components are independent or interdependent matters a lot to systemic disasters such as pandemics or generalized crises. The interdependence increases the probability of ruin, to the point of certainty.

(This concept is important in the financial world, as well.)

As Forbes’ Brian Stoffel notes:

Let’s say each GM seed that’s produced holds a 0.1% chance of — somehow, in the intricately interdependent web of nature — leading to a catastrophic breakdown of the ecosystem that we rely on for life. All by itself, it doesn’t seem too harmful, but with each new seed that’s developed, the risk gets greater and greater.

 

The chart below demonstrates how, over time, even a 0.1% chance of ecocide can be dangerous.

 

I cannot stress enough that the probabilities I am using are for illustrative purposes only. Neither I, nor Taleb, claim to know what the chances are of any one type of seed causing such destruction.

 

The focus, instead, should be on the fact that the “total ecocide barrier” is bound to be hit, over a long enough time, with even incredibly small odds. Taleb includes a similar graph in his work, but no breakdown of the actual variables at play.

Taleb debunks other pro-GMO claims as well, such as:

 

1. The Risk of Famine If We Don’t Use GMOs. Taleb says:

Invoking the risk of “famine” as an alternative to GMOs is a deceitful strategy, no different from urging people to play Russian roulette in order to get out of poverty.

And calling the GMO approach “scientific” betrays a very poor—indeed warped—understanding of probabilistic payoffs and risk management.

2.  Nothing Is Totally Safe, So Should We Discard All Technology?  Taleb says this is an anti-scientific argument. Some risks are small, or are only risks to one individual or a small group of people.  When you’re talking about risks which could wipe out all life on Earth, it’s a totally different analysis.

3. Assuming that Nature Is Always Good Is Anti-Scientific.  Taleb says that statistical risk analysis don’t use assumptions such as nature is “good” or “bad”. Rather, it looks at the statistical evidence that things persist in nature for thousands of years if they are robust and anti-fragile.  Ecosystems break down if they become unstable.

GMO engineers may be smart in their field, but they are ignorant when it comes to long-run ecological reality:

We are not saying nature is the smartest pos­sible, we are saying that time is smarter than GMO engineers. Plain statistical significance.

4.  People Brought Potatoes from the Americas Back to Europe, Without Problem.  Taleb says that potatoes evolved and competed over thousands of years in the Americas, and so proved that they did not disrupt ecosystems. On the other hand, GMOs are brand spanking new … created in the blink of the eye in a lab.

GMOs Also INCREASE Pesticide Use, DECREASE Crop Yield, And May Be VERY Dangerous to Your Health

As if the risk of “ecocide”isn’t enough, there are many other reasons to oppose GMO foods – at least without rigorous testing – including:

On the plus side?  A few companies will make a lot of money.


    



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“Unleash The Toxic Sludge” – Europe’s Latest Brilliant Idea To Fight Deflation

By now all of our readers, if not so much the ECB (even though we know they read us religiously too), are aware that the biggest problem in Europe is the continent’s moribund, and record low, credit creation courtesy of a clogged monetary transmission pipeline which has resulted in a -2% “growth” in loans to the private sector, which as monetarists (and certainly Austrians) everywhere know is the necessary (if not sufficient) condition to stimulate inflation in a continent drowning in deflation.

 

This is also why, as we reported first back in October, rumors have been swirling that the ECB itself is now contemplating launching QE, although judging by the amount of endless chatter in recent weeks by both Draghi and Weidmann, it is becoming increasingly evident that Europe will do nothing and is hoping that merely jawboning will launch inflation as happened after Draghi’s summer of 2012 “whatever it takes” speech. How ironic that two years later, Draghi will do “whatever it takes” to crush the Euro… except actually do anything.

And confirming that the ECB will almost guaranteed not do QE, is the latest report from the FT that “European regulators are preparing to get their hands dirty by easing rules on an asset class once labelled toxic sludge, in a bid to boost lending to credit-starved small businesses in the region.” Translated – Europe is about to literally “unleash” the toxic sludge, i.e., all the worst of the worst debt that was the reason why Europe is in a 6 year-old depression, and hope and pray it somehow fixes itself.

From the FT:

The European market for securitisation has all but closed for business since the crisis, when the practice of slicing and dicing of loans into packages known as asset-backed securities was blamed for letting problems in the market for US subprime housing loans spread through the global financial system.

 

The EU is now seeking to revive the moribund market, an objective which is shared by the European Central Bank. Mario Draghi, ECB president, has hinted that were there sufficient liquidity in the market for asset-backed securities, the ECB would be prepared to buy them to counter the rising risk of deflation.

 

“We think that a revitalisation of a certain type of [asset-backed security], a so-called plain vanilla [asset-backed security], capable of packaging together loans, bank loans, capable of being rated, priced and traded, would be a very important instrument for revitalising credit flows and for our own monetary policy,” Mr Draghi said last month.

 

Michel Barnier, the EU commissioner responsible for financial services, will make it easier for insurers, one of the industry’s biggest potential customers, to hold these assets by easing capital rules on their holdings of relatively safe forms of these securities.

 

A revised draft of technical rules to implement Solvency II, the law governing the European insurance industry, seen by the Financial Times, reveals officials are planning to halve the capital requirements on securitisations deemed to be of high enough quality. 

 

Under the changes, the capital requirements on the safest securitisations would be sliced in half from 4.3 per cent to 2.1 per cent.

 

The move is part of a broader set of measures to support financing to the bloc’s businesses, which rely on bank lending far more than their US counterparts. A pledge to rebuild a European market for the repackaging of loans is set to feature in an update on the European Commission’s green paper on the future of finance, due to be unveiled on Thursday.

Sigh. What else can one possibly add here but…


    



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Gold Drops To 6-Week Lows, Back Under $1,300

Gold prices are down 6.6% from the post-Crimea referendum highs mid-March (but remain up 9% in 2014). For the 3rd day in a row, precious metals have come under sudden selling pressure and this morning’s has pushed Silver comfortably back below $20 and gold now back under $1,300. Notably copper prices are also fading on the heels of Chinese weakness overnight.

 

3rd day in a row of monkey-hammering…

 

Clearly there is a “war” premium supposedly coming out of PMs but we suspect this pressure is also coming from Chinese financing deals as we noted previously

 

Copper is also falling today…

 

Charts: Bloomberg


    



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