Monday, 11 December 2017

Monthly Archives January 2011

“Fed Keeps Pedal to the Metal As Egypt Unrest Weighs on Markets”

Posted by Tom Duncan
January 31, 2011
in Blog

“The Fed’s policy statement on Wednesday afternoon said emphatically what we have discussed here endlessly: Nothing is going to stop these guys from completing their mission. Nothing. Nunca, nada, niete. The guvs said neither the most recent pick-up in up in economic growth nor the continued surge in commodity prices would deter them from continuing […]

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“Chronicle of a Debt Foretold” – Economist

Posted by Tom Duncan
January 28, 2011
in Blog

“An odd thing occurred this week. Britain’s national debt jumped by £1.3 trillion, virtually 100% of GDP, and hardly anyone paid attention. The bad news was crowded out by the surprise 0.5% drop in national output in the last quarter of 2010. There was reason to this apparent insouciance. What happened was that the figures […]

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“U.S. Must Reduce Deficit, IMF Warns” – Washington Post

Posted by Tom Duncan
January 28, 2011
in Blog

“U.S. officials must act quickly to control government deficits or face slower growth and even more difficult choices in the future, the International Monetary Fund said Thursday in a report criticizing the tepid U.S. response to its rising public debt. The IMF warning comes as federal officials grapple with a congressional projection this week that […]

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“The Fed Has No Clothes” – O’Driscoll

Posted by Tom Duncan
January 28, 2011
in Blog

“Philadelphia Fed President Charles Plosser gave a major speech on Monday at the Central Bank of Chile. In the polite language of central bankers, the speech constitutes a systematic criticism of not only current Fed policy but of the Fed’s entire response to the financial crisis. Plosser’s speech updates Milton Friedman’s 1967 presidential speech to […]

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“Forex focus: should Britain prepare for ‘stagflation’?”

Posted by Tom Duncan
January 27, 2011
in Blog

“Goodness, the market is jittery. The moment the latest economic growth figures were announced yesterday morning, sterling fell 1.25 per cent against the euro and one per cent against the dollar within minutes. Obviously, no-one was expecting that GDP would show a drop of half a per cent in the last three months of 2010. […]

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“Dividends and Growth—the Two Go Hand in Hand in this Business Cycle”

Posted by Tom Duncan
January 27, 2011
in Blog

“The power of a few large-cap companies to sway stock market sentiment is great. As recent corporate events illustrate, not only does good earnings news move the market, but, increasingly, dividend news is moving share prices. This is big and it’s a sign of the new age of austerity among corporations and individual investors. Dividend […]

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The Wrong Way to Double Exports – Judy Shelton

Posted by Judy Shelton
January 26, 2011
in Blog

Beware of President Obama’s call for a doubling of U.S. exports over the next five years as a way to reduce the unemployment rate. The obvious quick route to export success for any nation is to depreciate its currency. Dollar depreciation is already being pushed by the Obama administration as the key solution for resolving […]

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“Transcript: GOP Response From Rep. Paul Ryan” – NPR

Posted by Tom Duncan
January 26, 2011
in Blog

“Millions of families have fallen on hard times not because of our ideals of free enterprise — but because our leaders failed to live up to those ideals; because of poor decisions made in Washington and Wall Street that caused a financial crisis, squandered our savings, broke our trust, and crippled our economy. Today, a […]

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Judy Shelton on Just Facts Radio!

Posted by Tom Duncan
January 26, 2011
in Blog

“On January 25, 2011 Jim Agresti and Steve Cardone interviewed eminent economist and global finance specialist Dr. Judy Shelton about the importance of sound money. Dr. Shelton is Co-Director of the Sound Money Project at the Atlas Economic Research Foundation. She has provided expert testimony on numerous occasions before the Joint Economic Committee, Senate Banking, […]

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Horwitz versus Eggertsson on the Great Depression

Posted by Tom Duncan
January 25, 2011
in Blog

Over at Coordination Problem, Steve Horwitz discusses his exchange with Gauti Eggertsson in regards to Eggertsson’s claim that Roosevelt’s policies led the U.S. out of the Great Depression. Horwitz disagrees with this view of history. It is an interesting exchange and well worth the read. Below, I provide links to the original article and the […]

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“Global Price Fears Mount” – WSJ

Posted by Tom Duncan
January 24, 2011
in Blog

“Mr. Trichet argues that budget discipline would help growth in Europe more than renewed stimulus, and called on the euro zone’s 17 member countries to strengthen “surveillance” of each other’s fiscal policies. In Europe, budget discipline benefits growth and job creation by “improving confidence of households, enterprises, investors and savers,” said the 68-year-old Frenchman. In […]

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“New Push at Fed to Set an Official Inflation Goal” – WSJ

Posted by Tom Duncan
January 24, 2011
in Blog

“Federal Reserve officials last year, prodded by Chairman Ben Bernanke, seriously considered adopting an explicit target for inflation of 2%, but Mr. Bernanke failed to forge a consensus and backed away. The issue could resurface in 2011. The Fed informally has said its goal is inflation of around 2%. But after years of internal debate […]

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“John Taylor: The Republicans’ Shadow Fed Chairman”

Posted by Tom Duncan
January 21, 2011
in Blog

“Taylor’s followers include the new GOP House leadership, the chairmen of key House committees, Presidential hopefuls, conservative thinkers, and others suspicious of Federal Reserve Chairman Ben Bernanke’s stimulative monetary policy and perceived alliances with Obama Administration officials. His Economics One blog is a must-read for Republicans seeking an alternative economic blueprint—and for Democrats hoping to […]

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“The Untold Inflation Story: Investor Risks and Opportunities” – Lombardi

Posted by Tom Duncan
January 21, 2011
in Blog

“This morning, the yield on the 90-day U.S. T-bills is up to 0.155%. Not a big deal, but let’s look at it a little closer. When the credit crisis arrived in 2008, there was a run to the safety of short-term U.S. Treasuries, which sent down yields sharply. A Federal Funds Rate of zero has […]

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“Can Austrian Theory Explain Construction Employment?” – Robert Murphy

Posted by Tom Duncan
January 20, 2011
in Blog

“As a service to readers of the Mises Daily, I immerse myself in the sometimes-stultifying skirmishes of the economics blogosphere. Recently, those arguing that the solution to our current economic woes involves a pumping up of “aggregate demand” seem to have scored a major victory over the economists who believe the housing boom led to […]

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“Appreciating China’s Currency” – Griswold

Posted by Tom Duncan
January 20, 2011
in Blog

“China’s President Hu Jintau arrives in Washington today for a state visit, turning the spotlight once again on U.S.-China trade and China’s allegedly undervalued currency, the yuan. Not one to let such an opportunity go to waste, Sen. Charles Schumer (D-N.Y.) is introducing legislationthat would threaten to impose duties on imports from China if the […]

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“Put Off Badly Needed Budget Cuts? Austerity Doesn’t Mean No Growth” – Reynolds

Posted by Tom Duncan
January 19, 2011
in Blog

The Times’ real point was to argue that, “Whatever the sum .. . cutting billions would be foolish at a time when joblessness is high and the recovery needs stimulus, not tightening. … Spending cuts need not and should not start today, but the nation needs to put a credible plan in place now to […]

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“Dodd-Frank and the Return of the Loan Shark” – WSJ

Posted by Tom Duncan
January 19, 2011
in Blog

“Banks can also drop riskier borrowers completely. In his letter to shareholders last spring, Jamie Dimon of J.P. Morgan Chase reported that, “In the future, we no longer will be offering credit cards to approximately 15% of the customers to whom we currently offer them. This is mostly because we deem them too risky in […]

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“Does Government Spending Affect Economic Growth” – Mercatus

Posted by Tom Duncan
January 19, 2011
in Blog

“Government spending, even in a time of crisis, is not an automatic boon for an economy’s growth. A body of empirical evidence shows that, in practice, government outlays designed to stimulate the economy may fall short of that goal. Such findings have serious consequences as the United States embarks on a massive government spending initiative. […]

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“Question 4: Hu Jintao raises an important issue” – William Kristol

Posted by Tom Duncan
January 18, 2011
in Blog

“Hu goes on to discuss the RMB and inflation, but that’s not particularly interesting. What’s thought-provoking is his claim that “the current international currency system is the product of the past.” China hawks and American hegemonists (I’m both) will be tempted to jump on this statement as a challenge to the U.S., which in a […]

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“A Worried Government Trapped On Inflation” – WSJ

Posted by Tom Duncan
January 18, 2011
in Blog

“There is a moral dimension, too. Coupled with interest rates being close to zero, inflation is an instrument of war against savers. It rewards those who have been irresponsible — governments that borrow too much and consumers who do similar — and punishes those who have behaved responsiblely by choosing to live within their means […]

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“Fed’s Plosser: Monetary Policy Has Its Limits”

Posted by Tom Duncan
January 18, 2011
in Blog

“In a speech to be delivered in Santiago, Chile, on Monday, Philadelphia Federal Reserve Bank President Charles Plosser cautioned against relying too much on the central bank and said its powers ought to be curbed to prevent abuse. “I believe we have come to expect too much from monetary policy,” he said, according to prepared […]

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Why Chairman Bernanke Is Wrong (Part One) – Daily Reckoning

Posted by Tom Duncan
January 17, 2011
in Blog

“Fed Chairman Bernanke believes in the Monetary Theory of the Great Depression, which holds that the Federal Reserve could have prevented the Great Depression by stopping the US money supply from contracting during the early 1930s. This is important because the Fed’s policy response to the current economic crisis – printing money and using it […]

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“Fed Up, Again” – Steve Hanke

Posted by Tom Duncan
January 14, 2011
in Blog

“One of the first casualties of a financial crisis is the truth. During times of stress, central bankers embrace a timehonored tradition: they issue anodyne statements that are economical with the truth. Central bankers are also prone to seize upon standard “solutions” that have been congealed into a crust of dogma by endless repetition and […]

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“The Great Debt Bubble of 2011” – Johan Norberg

Posted by Tom Duncan
January 14, 2011
in Blog

“‘The worst of the storm has passed,’ declared Barack Obama at the start of last year, seeking to calm the fearful. For his part, Gordon Brown assured Britain that talk of tough years ahead was ‘simply not true’. Both men spoke of their resolve to cure their economies, and did not seem to mind using […]

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“Foreigners Shun Europe’s Bonds, and Debt Piles Up” – NYT

Posted by Tom Duncan
January 13, 2011
in Blog

“Greece. Ireland. And now, it seems, Portugal. While the circumstances that have driven these debt-ridden members ofthe euro zone to the brink differ, they share one common characteristic: all three countries aggressively tapped their domestic banking systems for more debt long after they had been shut out of international bond markets.” Read more.  “Foreigners Shun […]

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“Toward Sensible Monetary Policy” – Ron Paul

Posted by Tom Duncan
January 13, 2011
in Blog

“Last week the 112th Congress was sworn in. I am pleased that I will be chairing the Monetary Policy Subcommittee of the Financial Services Committee, which has oversight of the Federal Reserve. Obviously, this position will facilitate my efforts to ensure the Fed provides the American people with more information about what they have been […]

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“Fed’s Fisher Against Any QE2 Expansion”

Posted by Tom Duncan
January 13, 2011
in Blog

“In interviews ahead of his speech, Fisher took a softer tone to the Fed’s current program, known as QE2. While he did not support it, Fisher said he was not eager to make any changes to the $75 billion per-month pace of purchases that is set to end in June. There are four new voting […]

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Rep. Paul Ryan Mentions SMP During Interview

January 12, 2011
in Blog

On January 5th, 2010, Rep. Paul Ryan, House Budget Committee Chairman, during an interview with Hugh Hewitt, outlined his plans and strategies on how to curb government spending and other budgetary reforms.  He also addressed other policy challenges, including monetary policy, mentioning during the interview Judy Shelton’s “A Guide to Sound Money,” as key to understanding sound money.  PR: You […]

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Ralph Benko on Pro-Growth Policy and Sound Money — Forbes

January 12, 2011
in Blog

Paul Ryan:  “The Band Is Getting Back Together”  One might think that our political elite would catch a clue regarding prosperity as one of one of the key sources of Happiness, of the three key missions in America’s original charter along with Life and Liberty. But the appeal of prosperity is inexplicably difficult for our ruling […]

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“M&S Warns of Rising Inflation” – WSJ

Posted by Tom Duncan
January 12, 2011
in Blog

“Marks & Spencer Group PLC is facing the specter of rising inflation as it fights for market share in the fiercely competitive U.K. grocery and clothing market, just as the government’s austerity cuts start to bite. The U.K. high street bellwether has enjoyed a strong third quarter, including the key Christmas period, when same-store sales […]

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“New Move to Make Yuan a Global Currency” – WSJ

Posted by Tom Duncan
January 12, 2011
in Blog

“China has launched trading in its currency in the U.S. for the first time, an explicit endorsement by Beijing of the fast-growing market in the yuan and a significant step in the country’s plan to foster global trading in its currency. The state-controlled Bank of China Ltd. is allowing customers to trade the yuan, also […]

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“Could the U.S. Central Bank Go Broke?”

Posted by Tom Duncan
January 12, 2011
in Blog

“While that day seems distant now, some economists and market analysts have even begun pondering the unthinkable: could the vaunted Fed, the world’s most powerful central bank, become insolvent? Almost by definition, the answer is no. As the monetary authority, the central bank is the master of the printing press. It can literally conjure up […]

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“Gold May Rise as European Sovereign-Debt Crisis Spurs Demand for a Haven”

Posted by Tom Duncan
January 12, 2011
in Blog

“Gold, little changed in London, may rise after a member of theFederal Reserve said the bank could pare back stimulus measures and Europe’s governments wrestled with the sovereign-debt crisis, boosting demand for a haven. Federal Reserve Bank of Philadelphia President Charles Plosser said yesterday that the U.S. central bank may have to reassess asset-purchase plans […]

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“Bernanke Rejects Bailouts” – WSJ

Posted by Tom Duncan
January 12, 2011
in Blog

“Mr. Bernanke played down the risk of a major municipal-bond crisis, noting that muni markets have been functioning normally, with healthy trading volumes and lots of issuance. But he said that if municipal defaults did become a problem, it would be in Congress’s hands, not his. “This is really a political, fiscal issue,” he said. […]

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Good piece by Bell and Danker on Forbes

Posted by Alex Chafuen
January 11, 2011
in Blog

“Would-be reformers have tried to devise solutions designed in large part to avoid including gold, but none have caught fire or shown themselves to be as transparent and simple as the gold standard. The only real debate is between paper money and gold-backed money, and it is already getting under way at the highest levels.” […]

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“ECB Intervenes As Debt Crisis Deepens” – Financial Times

Posted by Tom Duncan
January 11, 2011
in Blog

“The European Central Bank intervened to prop up the eurozone bond markets on Monday as political leaders and bankers warned the debt crisis was deepening amid fears Portugal was edging closer to an international bail-out. Although European Union officials denied they were talking about a bail-out for Portugal, the ECB had to buy the country’s […]

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“ECB Gives Portugal Temporary Lifeline, Traders Say”

Posted by Tom Duncan
January 11, 2011
in Blog

“The European Central Bank threw Portugal a temporary lifeline on Monday by buying up its bonds, traders said, as market and peer pressure mounted for Lisbon to seek an international bailout soon. A senior euro zone source said on Sunday that Germany, France and other euro zone countries were pushing Portugal to seek an EU-IMF […]

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“U.K. Think Tank Sees 20% Chance of Euro’s Survival” – WSJ

Posted by Tom Duncan
January 11, 2011
in Blog

“Europe’s common currency, battered for more than a year by a sovereign debt crisis, is unlikely to survive the next decade in its current form, the Center for Economics and Business Research warned Friday. In a list of top 10 predictions for 2011, the CEBR, a U.K.-based think-tank, gave the euro a slim one-in-five chance […]

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“Cameron Sees Threat From Rising Inflation” – Financial Times

Posted by Tom Duncan
January 11, 2011
in Blog

“David Cameron has warned that rising inflation poses a threat to Britain amid warnings from economists that the Bank of England has failed to tackle the worrying trend. The prime minister insisted he did not want the country to go back to the days when inflation was a persistent problem. The recent figures – caused […]

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“Rising Inflation Is ‘No Blip'” – Financial Times

Posted by Tom Duncan
January 11, 2011
in Blog

“As UK Prime Minister David Cameron issues a warning over rising inflationary pressure, Chris Giles provides an analysis of the challenge faced by Britain and the rest of the world.” Watch it here.  “Rising Inflation Is ‘No Blip’”  Chris Giles  Financial Times video, January 10, 2011.  Image by Susie B / FreeDigitalPhotos.net.

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Selgin’s ‘Less Than Zero’: Required Reading for Central Bankers

Posted by Tom Duncan
January 10, 2011
in Blog

“By chance I came across two articles today that are wildly optimistic about global economic growth in the future. First, via Karl Smith, I see that Robin Hanson is talking up the possibility of a robot-induced “singularity” in the future that will radically increase global economic growth rates. Second, Ambrose Evans-Pritchard is highlighting an HSBC […]

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“China SAFE Offl: Fed Policy Could Fuel Global FX Intervention”

Posted by Tom Duncan
January 10, 2011
in Blog

“Quantitative easing carried out by the U.S. Federal Reserve could exacerbate global currency interventions, hurt the developed countries and fuel flows of speculative capital into emerging market economies, a senior official with China’s State Administration of Foreign Exchange said in comments published Monday. Liu Wei, a director with the foreign exchange reserve manager, also said […]

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“The Great Inflation and Monetarism” – Lawrence H. White

Posted by Tom Duncan
January 10, 2011
in Blog

“During the Second World War, American monetary policy was dedicated to providing cheap credit to the federal government. This policy resulted upward pressure on prices and was suppressed by wage and price controls enforced by the Office of Price Administration (1941–47). With the inflation rate spiking upward in 1951, price controls were reinstated under the […]

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“Inflation on the Rise in Latin America” – WSJ

Posted by Tom Duncan
January 7, 2011
in Blog

“Consumer prices are rising at a quick pace in the some of the largest economies in Latin America, complicating the task of governments that want to maintain high growth rates without sparking inflation. On Friday, Brazil announced that consumer prices in 2010 had increased faster than the government’s targeted levels, mainly driven by higher food […]

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“Near-Zero Short-Term Interest Rates May Go Lower Under FDIC Rule”

Posted by Tom Duncan
January 7, 2011
in Blog

“A planned change in deposit insurance fees for U.S. banks may lower already near-zero short-term interest rates, according to strategists at Barclays Plc, Bank of America Merrill Lynch and the Royal Bank of Canada. The Federal Deposit Insurance Corp. proposed broadening the base for deposit insurance fees to banks’ liabilities, rather than domestic deposits. The […]

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“Taming Inflation in China, Brazil, and India”

Posted by Tom Duncan
January 6, 2011
in Blog

“Chairman Bernanke’s experiment with quantitative easing continues to have unintended consequences for the global economy, due to the impact of the equation highlighted below: QE2 = inflation [globally] = monetary policy tightening [globally] = slower growth [globally] A brief review of global economic data points highlights struggles with inflation in three very key countries: China, […]

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“Fed Policy, Emerging Market Inflation Keep Gold’s Buzz in 2011” – Forbes

Posted by Tom Duncan
January 6, 2011
in Blog

“Another source of demand could be central banks. The IMF’s sales quota will run its course and possible sellers like the German Bundesbank and the Swiss National Bank have said they have no intention of unloading bullion, HSBC says. Meanwhile, Asian central banks, particularly China and India have developed a greater appetite for gold in […]

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“The Fiscal Trap”

Posted by Tom Duncan
January 5, 2011
in Blog

“Fed chairman Ben Bernanke concedes that, while necessary, a new large purchase of government bonds by the Fed to help cover the deficit will not completely solve our problem of slow growth. Many in the markets and around the world express the same sentiment in a more negative way—saying this latest round of “quantitative easing” […]

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Is QE2 Good for CRE?

Posted by Tom Duncan
January 5, 2011
in Blog

“In spite of their security purchase plans, the Fed has not been successful in keeping long-term Treasury yields low. As the yield chart above indicates, 10-year prices have been falling in spite of the Fed’s buying spree (remember, yields go up when prices are falling). The Fed’s argument is that the recent stimulus packages approved […]

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