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Articles by Constantin Gurdgiev

14/4/21: The share of those in unemployment > 27 weeks is rising

April 14, 2021

One way to look at the state of the real (as opposed to financialized and corporate-value focused) economy is to look at unemployment. And one of the strongest indicators of longer term changes in the structure of the real economy is the fate of the longer term unemployed. Here is an interesting snapshot of data: the percentage of those unemployed for 27 week or longer in the total pool of the unemployed. The higher the number, the more structural is the unemployment problem. If the above is not clear enough, here is the same data expressed in the form of the range for each 12 months period (rolling) between maximum share of the longer term unemployed in the overall pool of unemployment and the minimum share:All of the above suggests we are in deep trouble. And this trouble has been

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8/4/21: BRIC Composite PMIs 1Q 2021: A Mixed Bag for Recovery Votes

April 8, 2021

I covered BRIC Manufacturing PMIs for 1Q 2021 (https://trueeconomics.blogspot.com/2021/04/5421-brics-manufacturing-pmis-1q-2021.html) and BRIC Services PMIs (https://trueeconomics.blogspot.com/2021/04/8421-bric-services-pmi-1q-2021-slowing.html) in the two posts earlier.  Now, the round up analysis based on Composite PMIs:Brazil Composite PMI fell from 54.4 in 4Q 2020 to 52.1 in 1Q 2021, marking a slowdown in growth conditions in the economy. Quarterly activity in 1Q 2021 is still ahead of where it was in 3Q 2020 (51.6) and marks third consecutive quarter of growth. But, for the first time during this recovery period, Brazil Composite PMI is now below Global Composite PMI (53.43 in 1Q 2021).Russia Composite PMI increased from recessionary 47.7 in 4Q 2020 to still negative-growth (albeit

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8/4/21: BRIC Services PMI 1Q 2021: Slowing Growth Momentum

April 8, 2021

Earlier this week, I posted on the latest PMI reports for BRIC economies for Manufacturing sector (https://trueeconomics.blogspot.com/2021/04/5421-brics-manufacturing-pmis-1q-2021.html).  Now, let’s cover Services Sector 1Q 2021 PMIs. Remember, Markit – source of data – cover only monthly PMIs.As reminder, Manufacturing PMIs fell in all BRIC economies except for Russia in 1Q 2021 compared to 4Q 2020. As the result, overall, BRIC Manufacturing Activity Index (GDP-weighted average of PMIs) fell from 54.8 to 52.8 between 4Q 2020 and 1Q 2021.In services sector:Brazil Services PMI slipped into a recessionary territory in 1Q 2021, falling from 4Q 2020 reading of 51.4 to 46.1 in 1Q 20201. This marks the lowest reading since 2Q 2020.Russia Services PMI rebounded robustly from 4Q 2020 reading of

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8/4/21: No Inflation Cometh?

April 8, 2021

Having written about strengthening signals of rising inflation globally and in the U.S. in particular before, here is today’s note from Markit on the matter: https://ihsmarkit.com/research-analysis/global-price-gauge-hits-new-high-as-input-cost-inflation-accelerates-sharply-Apr21.html To quote: global inputs inflation pressures are at their highest since 2008:By sector:Factory gate prices are scaling up:Manufacturing supply shortages at nearly historical highs:Prices of all, but financial services and consumer services are up through the roof:Profit margins are being demolished:And consumer goods prices are going through the roof:Which means that targeting 2-3% inflation at current monetary policies is plain bonkers. Unless Central Banks are willing to entertain inflation at +5-10 percent

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7/4/21: Ireland PMIs for March: Growth and Inflation Pressures

April 7, 2021

Ireland PMIs for 1Q 2021 are out this week, so let’s take a closer look at monthly activity data. March services PMI came in at a surprising 54.6 – up on 41.2 in February and 36.2 in January. Given the country is in a phase 5 lockdown, and there has been little change on that in recent months, the new reading is a bizarre one. Per Markit: "Three out of four monitored sub-sectors registered higher business activity in March. The strongest rate of expansion was in Financial Services, followed by Business Services and Technology, Media & Telecoms respectively. Activity in Transport, Tourism & Leisure declined for the eighth month running, but at the slowest rate since last August." A lot of hope-for vaccines and ‘getting back to normal’ as well as exports rise behind these figures. Services

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6/4/21: Edelman Trust Barometer: the Age of Cognitive Dissonance?

April 6, 2021

Some shocking, genuinely shocking data from the Edelman Global Trust Barometer for 2021. Let’s take a look. Start with this: Welcome to the world where sociopaths like Jeff Bezos are both trusted to be competent and perceived to be ethical. Meanwhile, at least w are catching up with what is happening in the tech sector:And with the Social Media…But we can’t be human without some serious cognitive dissonance… Healthcare is now the second most trusted sector of business in America. Yep, the same private healthcare that had to rely on public / State / Federal money and logistics to distribute vaccines. The same private healthcare that could not organize vaccinations. The same private healthcare that, effectively, bankrupted and overcharged millions of Americans for emergency treatments

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5/4/21: Heating up inflationary risks

April 6, 2021

No, hyperinflation and, in fact, high inflation, ain’t coming, yet. But the concerns with both are rising… Both, input prices and output prices have accelerated in March, compared to February in Markit’s Manufacturing PMIs. Headline Markit statement says: "Conditions in the global manufacturing sector continued to brighten at the end of the first quarter, despite the potential for growth to be stymied by rising cost inflationary pressures and supply-chain disruptions." (Emphasis is mine).  And more: "Demand outstripping supply also contributed to a marked increase in purchasing costs during March. Input price inflation surged to a near-decade high, the pass-through of which led to the steepest rise in output charges since data on selling prices were first tracked in October 2009."The

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5/4/21: BRIC’s Manufacturing PMIs: 1Q 2021

April 5, 2021

Given a lot of noise about economic re-opening and abatement of the late 2020 wave of the pandemic, we expected BRIC countries PMIs to improve significantly in 1Q 2021 compared to 4Q 2020. Alas, the opposite took place:Brazil Manufacturing PMI fell from 64.1 in 4Q 2020 to 55.9 in 1Q 2021. All three months of 1Q 2021 came in sub-60 (all three months of 4Q 2020 were above 60) and March 2021 was the lowest monthly reading since June 2020.Russia Manufacturing PMI slipped from 51.5 in February to 51.1 in March. On quarterly basis, Russia Manufacturing PMI actually managed to rise from a recessionary reading of 47.6 in 4Q 2020 to a weak recovery reading of 51.2 in 1Q 2021. This is the highest reading since 1Q 2019 and the first above-50 reading since the end of 2Q 2019. Russia was the only BRIC

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5/4/21: The Coming Wave of Financial Repression

April 5, 2021

In a recent article for The Currency, I covered the topic of the forthcoming wave of financial repression, as Governments worldwide pursue non-conventional fiscal tightening in years to come: Make no mistake, financial repression is coming in the US: https://thecurrency.news/articles/36547/make-no-mistake-financial-repression-is-coming-in-the-us/.

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5/4/21: The Entrepreneurship Boom: Forced, Voluntary and Funded

April 5, 2021

My recent article for The Currency covering the ongoing global developments in entrepreneurship: The US is experiencing an entrepreneurship boom. So, what is going wrong in Ireland?: https://thecurrency.news/articles/40790/the-us-is-experiencing-an-entrepreneurship-boom-so-what-is-going-wrong-in-ireland/

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2/4/21: America’s Scariest Chart: U.S. Employment Situation

April 2, 2021

Now, the last of the series of posts on U.S. labor markets, concluding with America’s Scariest Chart, plotting the index of employment (jobs) in the U.S. based on each recession-recovery cycle:Despite some positive headline numbers on some labor market metrics, jobs creation in the U.S. is not  progressing well-enough to claim any end in sight for the Covid19-induced recession. Current reading for jobs index, relative to pre-recession highs is woeful. So woeful, today’s state of U.S. markets ranks as the second worst jobs recession in modern history, so far, worse than the Great Recession. Good news is that in March, pace of recovery accelerated from a major slowdown experienced in the first two months of 2021. The bad news is, unless this pace is sustained, we are risking a scenario

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2/4/21: U.S. Duration of Unemployment

April 2, 2021

One of the America’s Scariest Charts – a long-term running issue I have been highlighting for a number of years now – is roaring back to prominence as Covid19 pandemic crisis continues to impact U.S. labor markets across virtually all possible metrics of health.Here it is: the average duration of unemployment spells:Unemployment spells become short at the start of the recession as new vintage unemployed join the ranks of long term unemployed. As the recovery sets in, unemployment duration starts to take into the account a different and changing mix of those on unemployment: the share of total unemployed who are short-term unemployed shrinks, the share of the longer term unemployed rises. Secularly, however, virtually every past recession since 1970s on has resulted in a longterm increase

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2/4/21: U.S. New Unemployment Claims

April 2, 2021

Continuing with the coverage of core statistics for the U.S. labor markets performance. This post covers new unemployment claims through March 20, 2021, with the last two weeks of data being preliminary estimates.In the week through March 20, 2021, new unemployment claims fell to 656,789, or four weeks running total of 2,892,799 dipping below the peak of the Great Recession levels of 4 weeks total of 3,313,000. This is the good news.The bad news is that latest reading would rank 58th worst in the history of the weekly series, if we are to exclude the Covid19 period. Another part of the bad news is that last week’s weekly rate of decline of 100,412, the fastest rate of decline in four weeks, is actually slower than average weekly rate of decline for the pandemic period. 4 weeks running

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2/4/21: U.S. Non-Farm Payrolls

April 2, 2021

In the first part of the series of updates on the U.S. labor markets, I covered continued unemployment claims (https://trueeconomics.blogspot.com/2021/04/2421-us-continued-unemployment-claims.html), followed by the second post covering labor force participation and employment-to-population ratio (https://trueeconomics.blogspot.com/2021/04/2421-us-labor-force-participation-and.html).Now, consider total non-farm payrolls – a measure of jobs present in the economy:Total non-farm payrolls rose in march 2021 to 143,400,000, up on 142,077,000 in February. However, the increase still leaves the payrolls 9,777,000 short of the pre-Covid19 highs. The rate of jobs addition rose in March to 1,323,000 from February growth rate of 1,097,000. Combined jobs expansions of February and March, however,

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2/4/21: U.S. labor force participation and employment to population ratio

April 2, 2021

In the previous post, I covered U.S. continued unemployment claims: https://trueeconomics.blogspot.com/2021/04/2421-us-continued-unemployment-claims.html, noting that decreases in unemployment counts are, in part, driven by workers dropping off unemployment rolls due to exits from the workforce and/or expirations of unemployment benefits. Here is the data on U.S. labor force participation rates and employment to population ratio through March 2021:Things are still ugly when it comes to these two measures of labor markets health in the U.S: Latest reading for U.S. labor force participation rate at 61.5 is just a notch up on February’s 61.3, but is unchanged on November 2020. Pandemic period average labor force participation rate is woefully low at 61.7, which is still higher than March

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2/4/21: U.S. Continued Unemployment Claims

April 2, 2021

Continued weekly unemployment claims fell in the week of March 20 to their lowest Covid19 pandemic period point of 3,794,000 (seasonally adjusted). The decline in the unemployment claims driven by a combination of:Jobs creationBenefits expirationExits from the labor forceEven with the positive news, U.S. current reading is in line with March 2011.More updates on the U.S. labor markets coming up, so stay tuned.

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2/4/21: COVID19: Nordics v Sweden

April 2, 2021

Sweden continues to perform poorly compared to peer countries, irrespective of how one defines Nordic countries as a group:As table above shows, Sweden is the worst performer, by a large margin than any other Nordic or Northern European country when it comes to deaths from Covid19 pandemic.Per charts below, adjusting for population differences, Sweden performs worse than any Nordic group of countries configuration imaginable in cases and deaths counts:These facts are now recognized by policymakers in Sweden itself, even though the country continues to be a poster-child for the Covid19 denialists around the world.

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2/4/21: COVID19: U.S. vs EU27 comparatives

April 2, 2021

US vs EU27 comparatives in the pandemic dynamics through the week 12 of 2021 are showing continued, albeit declining improvement in the relative position of the US. That said, much of the improvement is down to lags in new waves development, with the EU27 now firmly in its Wave 3 and the U.S. potentially entering Wave 4.Based on the table and charts posted above, Europe (EU27) has now lost the plot on containing the pandemic. This takes place at the time when EU27 is botching roll out of vaccinations. On the more optimistic side, the U.S. roll out of vaccines has been relatively fast-paced, although logistics and delivery have been highly varied across different states and effectiveness can be significantly improved.As the result, U.S. has managed to somewhat shrink the gap in terms of

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2/4/21: COVID19: BRIICS

April 2, 2021

As warned last month, BRIICS are now in a new wave of the pandemic, just like the rest of the world:The new wave is worse than the previous one in terms of new weekly case counts and deaths. Brazil and India are leading the new cases pandemic, while Brazil leads in terms of deaths. Russia is relatively stable on deaths counts at highly elevated levels, while India death counts (highly suspicious in terms of low numbers throughout the entire 2021 so far) are now rising once again.Table above shows summary of dynamics in current weekly cases and deaths relative to the prior 4 weeks average. These numbers strongly indicate that risk of pandemic will continue to spill over across the world, with no country immune to the new wave developing, until reaching ‘herd immunity’ levels via

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1/34/21: COVID19: Most impacted countries

April 2, 2021

Here is a set of summary tables for world’s most impacted countries:First, 17 countries with more than 7% of population tested positive:And 16 countries with more than 0.15% of population dead:Most are smaller in population countries. Outliers to this rule are:The U.S. that enters both of the lists as the only country with population > 15 millionMexico that enters the list for highest mortality countries (alongside the U.S.) – the only two countries on the list with population > 100 millionSpain, UK and Italy are the three countries on the deadliest countries list with population between 45 million and 99 million.The new wave starting means I should update the table for most impacted countries based on case counts alone. Prior to this week, I tracked countries with > 250,000 cases. There

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1/4/21: COVID19: Europe and EU27

April 2, 2021

Both Europe and the EU27 are now in a new wave, Wave 3, of the pandemic, just as the rest of the world (https://trueeconomics.blogspot.com/2021/04/1421-covid19-worldwide-data.html). There is no denying that fact:Over the last 4 weeks, average number of weekly cases is up massive 37% compared to prior four weeks’ average in Europe and a whooping 40% in the EU27. Deaths are lagging 4-weeks on 4-weeks changes, so by this metric, we are seeing a decline of 18% in Europe and 15% drop in the EU27. But, controlling somewhat for lags, current latest weekly death counts are up 11% on 4 weeks average in both Europe and the EU27. Sign of things to come: week 12/2021 rate of new cases is up 22% on 4-weeks average in Europe and 19% in the EU27. So the data suggests things are more likely to get worse

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1/4/21: COVID19: Worldwide Data

April 2, 2021

Last time I updated the numbers for global Covid19 pandemic, we were starting to spot the early signs of a new wave, Wave 4 emerging in new cases counts. Now, sadly, we can confirm exactly this development.The virus does not care much for the bloviation of political leaders around the world. It does not care for Joe Biden’s plans for the Fourth of July or State leaders’ dreams of the Spring Break raves going on. It doesn’t give a damn is European political establishment is running around the place like headless chickens, constantly re-jigging and gerrymandering performance and risk metrics in a desperate attempt to appease one side of electorate having previously tried to appease the other. The virus might care about the rates of vaccinations, but, hey it isn’t worried too much: the rates

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14/3/21: COVID19 Update: U.S. vs EU27 comparatives

March 14, 2021

Previous posts covered updates for Covid19 pandemic stats:Worldwide data: https://trueeconomics.blogspot.com/2021/03/12321-covid19-update-worldwide-data.html, Europe and the EU27 countries: https://trueeconomics.blogspot.com/2021/03/13221-covid19-update-europe-and-eu27.html, Most impacted countries: https://trueeconomics.blogspot.com/2021/03/13321-covid19-update-most-impacted.html, andBRIICS dynamics: https://trueeconomics.blogspot.com/2021/03/13321-covid19-update-briics.html.In this post, let’s take a look at the U.S. vs EU27 comparatives (some of these were touched upon in the previous posts).So, five charts and a table. Starting with weekly cases:Since the start of the pandemic, the U.S. has experienced three waves, against the EU27’s two. The EU27’s 2nd wave appears to have crested

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13/3/21: COVID19 Update: BRIICS

March 14, 2021

Previous posts covered updates for Covid19 pandemic stats:Worldwide data: https://trueeconomics.blogspot.com/2021/03/12321-covid19-update-worldwide-data.html, Europe and the EU27 countries: https://trueeconomics.blogspot.com/2021/03/13221-covid19-update-europe-and-eu27.html, andMost impacted countries: https://trueeconomics.blogspot.com/2021/03/13321-covid19-update-most-impacted.htmlIn this update, let’s take a look at the dynamics of the pandemic in BRIICS (Brazil, Russia, India, Indonesia, China and South Africa) group of countries.First, weekly case counts:Brazil is leading BRIICS into what appears to be a new wave, Wave 4 of the pandemic. All other BRIICS countries are showing sustained moderation in new cases. There is also a much smaller uptick in new cases in India.A similar

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13/3/21: COVID19 Update: Most impacted countries

March 14, 2021

In previous posts, I covered updates for Covid19 pandemic figures for:Worldwide data: https://trueeconomics.blogspot.com/2021/03/12321-covid19-update-worldwide-data.html, andEurope and the EU27 countries: https://trueeconomics.blogspot.com/2021/03/13221-covid19-update-europe-and-eu27.html.Now, world’s worst hit countries and regions.World’s 5 worst impacted countries by the number of cases per capita (the first table above), with ranks 1 = worst:AndoraMontenegroGibraltarCzechiaSan MarinoThe U.S. ranks 9th worst in the world – the only country with more than 100 million population. There are three countries with population over 10 million but below 100 million on the list: Belgium (15th) and Portugal (11th), plus Czechia.World’s 5 worst impacted countries by the number of deaths per

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13/2/21: COVID19 Update: Europe and EU27

March 13, 2021

Updating Covid19 data for Europe and EU27 for the period through Thursday this week. In line with global data trends (covered here: https://trueeconomics.blogspot.com/2021/03/12321-covid19-update-worldwide-data.html), Europe and the EU27 are starting to show some tentative signs of a risk of new wave of the pandemic emerging.Both Europe and EU27 have experienced two waves of the pandemic, with the second wave characterized by two key features: 1) long and slow decline in the new cases counts, lasting from the peak of the wave around Week 45 of 2020; and 2) Re-acceleration in the wave into another local peak at Week 1 of 2021 and bottoming out in Week 6.Since Week 7, we are in a potential start of Wave 3, as noted in the chart above.Both Europe and EU27 are indicating the bottoming out of

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12/3/21: COVID19 Update: Worldwide Data

March 13, 2021

Updating charts for weekly worldwide numbers covering the Covid19 pandemic, here is the data through Thursday this week:In terms of case counts: there is some ambiguity in timing the waves of the pandemic, driven by the dynamics of the new cases and, to a lesser extent, deaths.Globally, there is no doubt, however, that we have exited Wave 3 that started around Week 34 of 2020, peaked in Week 1 of 2021, and, it appears to have bottomed out in Week 7 of 2021.The latest level of new infections remains well above Waves 1 and 2 peaks. More ominously, since Week 8 of 2021, we are seeing a potential re-emergence of a new wave, Wave 4.Weekly death counts have also peaked in Week 3 of 2021, marking the end of Wave 3. However, the latest death counts are still well above peaks of Waves 1 and 2, and

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15/2/21: Pump & Dump, Illicit Finance and Market Inefficiency: Cryptos under Review

February 15, 2021

A fascinating fresh survey of microeconomics literature on crypto currencies: "The Microeconomics of Cryptocurrencies" by Hanna Halaburda, Guillaume Haeringer, Joshua Gans, Neil Gandal (CESifo Working Paper 8841, 2021, NBER version link here: https://www.nber.org/papers/w27477).The paper is really too extensive to summarize here, so I encourage everyone interested in cryptos to read it. I can, however, offer some non-priority ordered comments on some of the passages I find interesting and novel.Let’s start with ‘efficiency’ and the ‘nothing-at-stake problem’. Authors reference Saleh (2019) which derives "sufficient conditions that guarantee that consensus" to fork is an equilibrium. "Saleh then derives two additional results. "First, restricting the ability to large stakeholders

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14/2/21: COVID19 Update: Sweden and Nordics

February 15, 2021

Prior posts on COVID19 stats updates covered:Global data and trends: https://trueeconomics.blogspot.com/2021/02/14221-covid19-update-worldwide-data.html;European & EU27 data and trends: https://trueeconomics.blogspot.com/2021/02/14221-covid19-update-europe-and-eu27.html; Data and trends for the most impacted countries and regions: https://trueeconomics.blogspot.com/2021/02/14221-covid19-update-most-impacted.html; Data on COVID19 dynamics in BRIICS countries: https://trueeconomics.blogspot.com/2021/02/14221-covid19-update-briics.html; andCOVID19 stats comparing US and EU27 & Europe: https://trueeconomics.blogspot.com/2021/02/14221-covid19-update-us-vs-eu27.html.Lastly, let’s run through comparatives for COVID19 dynamics in Sweden vis-a-vis the rest of the Nordics.No matter how you define

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14/2/21: COVID19 Update: U.S. vs EU27 comparatives

February 14, 2021

In previous posts, I covered the latest data for weekly Covid19 pandemic dynamics for:Global data and trends: https://trueeconomics.blogspot.com/2021/02/14221-covid19-update-worldwide-data.html;European & EU27 data and trends: https://trueeconomics.blogspot.com/2021/02/14221-covid19-update-europe-and-eu27.html; Data and trends for the most impacted countries and regions: https://trueeconomics.blogspot.com/2021/02/14221-covid19-update-most-impacted.html; andData on COVID19 dynamics in BRIICS countries: https://trueeconomics.blogspot.com/2021/02/14221-covid19-update-briics.html.Now, as usual, EU27 (and Europe) comparatives to the U.S.Start with new cases (weekly totals): Since the start of the pandemic, the U.S. has experienced three waves, against the EU27’s two. The EU27’s 2nd wave

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