The Covid19 New World Order and the World Economic Forum

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Re: The Covid19 New World Order and the World Economic Forum

Postby Elvis » Tue Aug 09, 2022 5:39 pm

Grizzly wrote:Financial Rebellion with Catherine Austin Fitts - Does BIS Owe Us $21Trillion ($65,000 per Person) ?
https://brandnewtube.com/watch/financia ... V3V2T.html


I used to hold CAF in some regard, her experience in government housing/banking programs "lent" her some authority. But she makes statements such as,

"The central bankers print money and they inject it directly into the economy..." [@ 36:45]

CAF—like 90% of commentators and "analysts"—doesn't seem to know that bank reserves, which are what the Fed issues, are never injected directly into the economy. Bank reserves are 'settlement balances' that never leave the Fed, they just get moved around from bank to bank as payments (checks & transfers) are cleared (including payments from & to the federal government).

The money that we private businesses & consumers earn & spend is either paper cash & coin or "bank money," a "deposit" the bank creates for you—a promise to give you access, on demand, to the bank's settlement balances at the Fed (reserves). You can't buy a yacht with bank reserves, nor are reserves loaned out to borrowers.

I don't see a mechanism for stealing bank reserves, which is what I think CAF is talking about—she doesn't seem to make any distinction, but talks about both being "back-doored." The missing Pentagon trillions is explained somewhere in the vast, impenetrable DOD accounting books, but I imagine it's like a million Enrons.

At [8:28] CAF asserts that "the US taxpayers are liable for" federal bonds; this formulation exists only in textbooks — textbooks written by neoliberal/neoclassical/monetarist economists who in spite of all evidence cling to their idiotic, antisocial models.

I used to listen to CAF with great interest, because I knew something was wrong with the financial system and she had some intriguing answers. Then I learned Modern Monetary Theory and how these conservative, pro-business/anti-labor myths about money, banking & government finance have come to prevail, by steady mass conditioning.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: The Covid19 New World Order and the World Economic Forum

Postby Grizzly » Thu Aug 11, 2022 12:49 am

“The more we do to you, the less you seem to believe we are doing it.”

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Re: The Covid19 New World Order and the World Economic Forum

Postby JackRiddler » Thu Aug 11, 2022 1:34 pm

Elvis » Tue Aug 09, 2022 4:39 pm wrote:The missing Pentagon trillions is explained somewhere in the vast, impenetrable DOD accounting books, but I imagine it's like a million Enrons.


In all audits so far, the Pentagon has been incapable of showing how the overall books balance, with the discrepancies going into the trillions (famously 2.3 trillion in the audit publicized on 10 September 2001).

It means that confronted by their vast-vast-vast empire of bases, carrier groups, and other useless junk, and millions of personnel, the auditing accountants can't match valuations of assets (such as real estate and inventory) to an equivalent amount in liabilities (i.e., depreciation of said assets). At least, that is true with regard to whatever parts of the planetary beast auditors were allowed to see and were capable of measuring. Hope I'm getting the accountant speak right.

It does not mean a dollar amount equivalent to $2.3 trillion (or $5 trillion, in a more recent audit attempt) had been siphoned off into some set of awesome slush funds, as one might have first thought ("one" including me and most people on first hearing of these stories).

I expect it is the product of a) the secrecy religion at all levels, plus active obstruction against audits and disclosure, which b) functions to hide every conceivable form of dirt, stealing, incompetence, cover-ups, and global and domestic imperialist crime; and c) incompetence or inability to encompass this planet-spanning hydra of ten thousand heads and thirty million tentacles, with a huge number of those connected to private hydras with another x-thousand heads. And plenty of room in there for d) slush funds, of course.

This leaves room for even more corruption and atrocity than the initial thought suggested, but it's even larger and more impenetrable and complicated than one can conceive. And the publication of estimates like "oops, we're missing the equivalent of 10% of the entire U.S. economy, ha sorry" turns into their big, traditional fuck you to everyone: You can believe anything you like, you are allowed to know nothing, and even we don't have too much of a clue.

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Re: The Covid19 New World Order and the World Economic Forum

Postby drstrangelove » Thu Aug 11, 2022 2:02 pm

Bank reserves escape into the economy through fractional reserve lending. increase bank reserves = increase credit = increase money supply. these are direct impacts, not inferred. to say otherwise is like arguing the gold standard had nothing to do with deflationary currency and price instability. they abolished fractional reserve lending ratios in march 2020, hence the expansion of the money supply since then, and the high levels of inflation in most areas of the economy due to credit.

housing price inflation = due to increased money supply through credit
consumer discretionary inflation = due to increased money supply through credit
consumer staples inflation = mostly supply side, ukraine, and whatever is happening with oil price fixing cartels
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Re: The Covid19 New World Order and the World Economic Forum

Postby Elvis » Fri Aug 12, 2022 5:54 pm

drstrangelove wrote:Bank reserves escape into the economy through fractional reserve lending. increase bank reserves = increase credit = increase money supply. these are direct impacts, not inferred. to say otherwise is like arguing the gold standard had nothing to do with deflationary currency and price instability. they abolished fractional reserve lending ratios in march 2020, hence the expansion of the money supply since then, and the high levels of inflation in most areas of the economy due to credit.


Fractional reserve lending doesn't exist, it hasn't existed for 500 years. Bank reserves do not escape into the economy. Bank do not lend out any reserves (except to other banks), and reserves never leave the the Fed, where they are moved from account to account in settlement of payments. That's why bank reserves are more properly called "settlement balances" because they're used to settle payments (clear checks, etc.) among banks—not to fund loans.

Increasing bank reserves does not increase credit issued by banks; this was plain when the Fed multiplied the amount of bank reserves and banks didn't increase lending (rather, bank lending decreased). Adding bank reserves doesn't increase the money supply. Loans and federal spending increase the money supply. Bank lending in the modern era was never reserve-constrained or deposit-constrained, because banks could always obtain, easily, any reserves required to match loans. Since 2008, the Fed pays banks interest on reserves, making holding 'excess' reserves more attractive. It had no effect of increasing bank lending.

In March 2020 the Fed ended minimum reserve requirements—not fractional lending ratios, which didn't exist then, or now. It did not increase the issue of bank credit.

This faulty perception of the banking framework is the source of many confusions and misguided policies—and not least the myth of money as a private creation, which turns reality on its head and puts Big Finance in the driver's seat.

Here are some resources for better understanding the banking system:


https://www.forbes.com/sites/francescop ... 47264e2e69

If You Don't Understand Banks, Don't Write About Them
Frances Coppola

“Money creation” by banks arises from two things:

- Double entry accounting
- The way we define and measure “money”

Under double entry accounting, creation of a new loan asset requires creation of an equivalent liability. This is the new deposit that is created with every loan. Thus, when BigBank lends $90 to a customer, it creates a new loan asset for $90 and a new deposit for $90. This deposit is created “from nothing” (ex nihilo).

The money created by central banks – currency (notes & coins) and bank reserves – is known as “base money.” Money created by the private sector and included in measures of the “money supply” is known as “broad money.”* Most of the money people use every day is broad money. When your employer pays your wages directly into your bank account, they are paying in broad money. When you pay your mortgage from your bank account, or use a credit card, you are using broad money. Unless you are a bank, the only base money you will ever use is banknotes and coins...


* (also called "bank money")


https://www.forbes.com/sites/francescop ... 9b49587d20

Banks Don't Lend Out Reserves
Frances Coppola

Firstly, here’s a short explanation of bank lending. Under normal circumstances, deposits and loans are more-or-less equal across the banking system as a whole. This is because when a bank creates a new loan, it also creates a new balancing deposit. It creates this "from thin air", not from existing money: banks do not "lend out" existing deposits, as is commonly thought. You can see this clearly on the chart. Until 2009, deposits and loans were roughly equal.

But since 2009 there has been a very evident change. There is a large and growing gap between loans and deposits. So what is causing this?

Firstly, banks, households and businesses have been deleveraging. That means they are paying off (or writing off) loans and not taking on any more. Damaged banks don't want to lend, damaged households don't want to borrow and fearful businesses don't want to invest. The combination of these three factors means that both the supply and the demand for loans are considerably below the levels prior to the financial crisis. This explains the evident fall in loan creation (red line) in 2009. Though the line is now rising. Seems banks are lending, actually, though not at the rate they were before the crisis....



https://research.stlouisfed.org/publica ... multiplier

Econ Primer: September 2021

Teaching the Linkage Between Banks and the Fed: R.I.P. Money Multiplier
by Jane Ihrig, Gretchen C. Weinbach, and Scott A. Wolla

Many introductory economics classes include lessons on the important roles of banks and the Federal Reserve (Fed) in the U.S. financial system and how these two entities are linked. While some textbooks provide sound descriptions of these topics, many miss some key aspects of how banks make decisions, inaccurately explain how the Fed implements monetary policy, and contain outdated descriptions of the linkage between banks and the Fed. This outdated link is often tied to the concept of the "money multiplier," which is anchored in an obsolete explanation of how the Fed operates and influences banks. We recommend that textbook authors and teachers eliminate the use of the money multiplier concept in explaining the linkage between banks and the Fed. Instead, we suggest that classroom materials emphasize a contemporary description of how the Fed operates, focusing on changes in interest rates, not monetary quantities, as the mechanism through which Federal Reserve policies are linked with the banking system and the rest of the economy.

In this article, we start with a description of the role of banks and the Fed in the financial system. From there we discuss some linkages between the two. We conclude with a summary of the key, current concepts most relevant for the classroom....



https://www.bankofengland.co.uk/-/media ... conomy.pdf

Money creation in the modern economy
By Michael McLeay, Amar Radia and Ryland Thomas of the Bank’s Monetary Analysis Directorate.

Money creation in practice differs from some popular misconceptionsbanks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits.
[...]

The reality of how money is created today differs from the description found in some economics textbooks:

- Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.

- In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money 'multiplied up’ into more loans and deposits.
[...]

As a by-product of QE, new central bank reserves are created. But these are not an important part of the transmission mechanism. This article explains how, just as in normal times, these reserves cannot be multiplied into more loans and deposits and how these reserves do not represent ‘free money’ for banks.



https://www.bankofengland.co.uk/-/media ... idence.pdf
Banks are not intermediaries of loanable funds — facts, theory and evidence
Zoltan Jakab and Michael Kumhof
June 2019

Macroeconomics was initially only able to offer limited analytical support because banks, with few exceptions, had been ignored in theoretical and empirical work. This has now changed, with a new literature that has made many valuable contributions. However, the conceptual and modeling framework that is almost universally used in this literature is the intermediation of loanable funds (ILF) model, and a critical feature of this model is that it adopts a shortcut that describes banks as intermediaries of physical resources akin to warehouses. We will demonstrate below that this is indeed the only possible interpretation of the ILF model, and we will argue that this shortcut is unnecessary, and that it should be avoided because it is counterfactual, and unrealistic in its implications...



This paper explains a few things:

"Paying Interest on Reserve Balances: It's More Significant than You Think"
Scott Fullwiler

Abstract

It has long been recognized that uncompensated reserve balances act like a tax on banks and that banks as a result expend scarce resources to avoid holding them. The Fed itself has historically supported legislation to enable it to pay interest on reserve balances (e.g., Kohn 2003), as have economists (e.g., Goodfriend 2002), both for reasons of economic efficiency and to improve the implementation of monetary policy. The traditional argument against interest payment has been that it would reduce the Fed’s earnings that are subsequently turned over to the Treasury (Feinman 1993b; Abernathy 2003). The purpose of this paper is to demonstrate the implications of paying interest on reserve balances on the daily operations of both the Fed and the Treasury. While the arguments here - for different reasons - generally are in favor of enabling the Fed to pay interest on reserve balances, more important than the actual payment of such interest is the perspective gained when considering in detail the operations of both in an environment where reserve balances earn interest.



Two books:

1. Money: The Unauthorized Biography by Felix Martin. You'll be really glad you read this book. :thumbsup

2. The Nature of Money - by Geoffrey Ingham. Ingham has a short paper summarizing the book:

https://www.econstor.eu/bitstream/10419 ... o02-a2.pdf

I contend that the methodology of orthodox economics is quite unable to explain the existence of money.



Ingham hits upon a crux of the issue:

If bank loans come from savings, where does the savings come from? If federal spending comes from taxes and bond sales, where did the money to pay taxes and buy bonds come from? In short, where did all the money come from?

Now we should ask why would orthodox neoclassical economics ignore, obfuscate—or conceal—the source of money?
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: The Covid19 New World Order and the World Economic Forum

Postby drstrangelove » Fri Aug 12, 2022 7:24 pm

I didn't say banks lent out reserves, i said an increase in bank reserves increases the amount of credit which can be lent out, unless the fractional reserve lending ratio is increased as well. The same effect can be achieved by decreasing the ratio instead of increasing reserves. But if the reserves are increased, the amount of credit created increases as well. That is, until they abolished the reserve lending ratio entirely by setting it to zero, which is what was announced on march 15, allowing infinite credit creation without the requirement for any reserves.

Federal reserve press release March 15, 2020 - https://www.federalreserve.gov/newseven ... 00315b.htm

Federal Reserve Actions to Support the Flow of Credit to Households and Businesses

. . .

Reserve Requirements
For many years, reserve requirements played a central role in the implementation of monetary policy by creating a stable demand for reserves. In January 2019, the FOMC announced its intention to implement monetary policy in an ample reserves regime. Reserve requirements do not play a significant role in this operating framework.

In light of the shift to an ample reserves regime, the Board has reduced reserve requirement ratios to zero percent effective on March 26, the beginning of the next reserve maintenance period. This action eliminates reserve requirements for thousands of depository institutions and will help to support lending to households and businesses.


You must be arguing the semantics of fractional reserve lending ratios vs minimum reserve requirements. Though the fed does not mention whatever it is you mean by "minimum reserve requirements" as distinct from - the ratio at which credit can be created relative to amount held in bank reserves. And you do not not explain what you mean by this either.

But since that Frances Coppola article you linked IS NOT at odds with what I have written at all, I'll assume we actually agree.

But where do reserve requirements come in? U.S. banks are required to hold reserves equivalent to 10% of eligible deposits. This is what the author has described, which is even more misleading as her book is entirely about the U.K., which has no reserve requirement.

Banks need reserves to make payments on behalf of customers. When you pay your mortgage from your bank account, the bank uses its own reserves to settle your payment. Reserves are not “cash, shareholders’ equity or anything relatively easy to sell,” and they are not “capital.” They are electronic base money created by the central bank, and only banks hold them. Banks can, and do, lend reserves to each other, but not to their customers.

Reserve requirements are intended to ensure that banks have enough reserves to meet customers’ demands to withdraw funds, either as physical cash or by making electronic payments. Clearly, the more deposits a bank has, the more reserves it needs. So BigBank, which has just created a new deposit, will need $9 more reserves to meet U.S. reserve requirements.


This is a fractional reserve ratio. To say it isn't is semantics. Such as suggesting that running is actually walking at a brisk pace. Same shit.
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Re: The Covid19 New World Order and the World Economic Forum

Postby Elvis » Fri Aug 12, 2022 10:01 pm

drstrangelove wrote: if the reserves are increased, the amount of credit created increases as well.

This is not correct, as explained above. Banks assess credit risk and extend credit to qualifying borrowers independently of their present reserve position; this was true before 2008 and is still true.


drstrangelove wrote:an increase in bank reserves increases the amount of credit which can be lent out

This is not correct, as explained above. Bank lending was never reserve constrained and the "ample reserves" regime did not increase extension of credit by banks.


I didn't say banks lent out reserves

You implied it: talking in terms of "fractional reserve lending" implies that a portion of customer savings are loaned out.


drstrangelove wrote: allowing infinite credit creation without the requirement for any reserves

Obviously reserves are required, or no interbank payments would clear. The Fed has simply made it a non-issue with its post-2008 'full reserves' policy, including paying interest on reserves. The ample reserves regime doesn't make possible any bank lending that wasn't equally possible before. Bank credit creation can't be infinite because banks are ultimately constrained by their capital (which is different than reserves). Of course, banks charge borrowers a margin above the Fed rate.


This action eliminates reserve requirements for thousands of depository institutions and will help to support lending to households and businesses.

That "will help to support lending" bit is a stretch to say the least—but that's the sort of outdated myth that neoclassical economics teaches and perpetuates. The Fed's own research refutes what amounts to a tossed-off benefit of ample reserves.

(Warren Mosler tells a story of looking for info on the Minneapolis Fed's website, and seeing an "explainer" for laypeople that talked about banks collecting deposits then lending them out. He called them up(!) and said, "You know that's not true—why put that on your website??" The woman at the Fed explained, "Well, we know, but we just thought that would be easier for people to understand." And so it goes.)


drstrangelove wrote: the ratio at which credit can be created relative to amount held in bank reserves

Before 2008 (and still today) banks obtained any needed reserves after issuing a loan. Banks were never constrained by the amount of reserves on hand.


Coppola wrote:So BigBank, which has just created a new deposit, will need $9 more reserves to meet U.S. reserve requirements.

That's a reserve requirement, not fractional reserve lending.

Of course banks have to hold reserves if they want to function as payment intermediaries in a federal reserve banking system. That function is distinct from banks' lending function. In fact there are some interesting proposals to pull most deposits out of the private banking network and let banks focus on their primary mission of assessing credit risk and issuing loans. (I'll look for a link.)
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Re: The Covid19 New World Order and the World Economic Forum

Postby Grizzly » Fri Aug 12, 2022 11:31 pm

meanwhile...

The COVID-19 scam has reached the memoryholing phase.

Image

Until next time!
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Re: The Covid19 New World Order and the World Economic Forum

Postby drstrangelove » Sat Aug 13, 2022 4:00 pm

what is the difference between fractional reserve lending and reserve requirement lending?
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Re: The Covid19 New World Order and the World Economic Forum

Postby Elvis » Sat Aug 13, 2022 5:29 pm

drstrangelove » Sat Aug 13, 2022 1:00 pm wrote:what is the difference between fractional reserve lending and reserve requirement lending?


"Fractional-reserve banking is the system of banking [...] under which banks that take deposits from the public are required to hold a proportion of their deposit liabilities in liquid assets as a reserve, and are at liberty to lend the remainder to borrowers."
https://en.wikipedia.org/wiki/Fractiona ... ve_banking


"Fractional reserve banking describes a system whereby banks can loan out a certain amount of the deposits that they have on their balance sheets"
https://www.investopedia.com/terms/f/fr ... anking.asp


The huge difference is that in reality, banks simply do not loan out customer deposits.


Those two citations go to show that Wikipedia, and especially Investopedia, are terrible sources for macroeconomic education. Wikipedia cites two textbooks; I have around ten introductory econ/macro textbooks, and eight of them get this wrong. It's a combination of an entrenched paradigm based on bad assumptions, ideology, and plain laziness.
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Re: The Covid19 New World Order and the World Economic Forum

Postby drstrangelove » Sat Aug 13, 2022 6:49 pm

But what is reserve requirement lending?
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Re: The Covid19 New World Order and the World Economic Forum

Postby Elvis » Sat Aug 13, 2022 9:02 pm

drstrangelove » Sat Aug 13, 2022 3:49 pm wrote:But what is reserve requirement lending?


"Reserve requirements and liquidity requirements ensure that banks have enough money to settle anticipated customer deposit withdrawals."

Period.


From the dreaded BIS:

https://www.bis.org/publ/work292.pdf

Bank reserves, bank lending, money and inflation

The preceding discussion casts doubt on two oft-heard propositions concerning the
implications of the specialness of bank reserves.
First, an expansion of bank reserves
endows banks with additional resources to extend loans, adding power to balance sheet
policy. Second, there is something uniquely inflationary about bank reserves financing. We
consider each in turn.

Does financing with bank reserves add power to balance sheet policy?

The underlying premise of the first proposition, which posits a close link between reserves
expansion and credit creation, is that bank reserves are needed for banks to make loans.
Either bank lending is constrained by insufficient access to reserves or more reserves can
somehow boost banks’ willingness to lend. An extreme version of this view is the text-book
notion of a stable money multiplier: central banks are able, through exogenous variations in
the supply of reserves, to exert a direct influence on the amount of loans and deposits in the
banking system.30

In fact, the level of reserves hardly figures in banks’ lending decisions. The amount of credit
outstanding is determined by banks’ willingness to supply loans, based on perceived risk-
return trade-offs, and by the demand for those loans.31 The aggregate availability of bank
reserves does not constrain the expansion directly. The reason is simple: as explained in
Section I, under scheme 1 – by far the most common – in order to avoid extreme volatility in
the interest rate, central banks supply reserves as demanded by the system. From this
perspective, a reserve requirement, depending on its remuneration, affects the cost of
intermediation and that of loans, but does not constrain credit expansion quantitatively.32 The
main exogenous constraint on the expansion of credit is minimum capital requirements
.
[. . .]

A striking recent illustration of the tenuous link between excess reserves and bank lending is
the experience during the Bank of Japan’s “quantitative easing” policy in 2001-2006. Despite
significant expansions in excess reserve balances, and the associated increase in base
money, during the zero-interest rate policy, lending in the Japanese banking system did not
increase robustly
(Figure 4).
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: The Covid19 New World Order and the World Economic Forum

Postby drstrangelove » Sun Aug 14, 2022 4:39 am

And how do they ensure these minimum required reserves are enough to settle withdrawals of the outstanding credit they issue? Are these reserves some kind of fraction of the amount of credit they issue? Is there some kind of ratio they use to determine the level of reserves required to credit outstanding?
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Re: The Covid19 New World Order and the World Economic Forum

Postby Wombaticus Rex » Sun Aug 14, 2022 11:08 am

drstrangelove » Sun Aug 14, 2022 3:39 am wrote:And how do they ensure these minimum required reserves are enough to settle withdrawals of the outstanding credit they issue? Are these reserves some kind of fraction of the amount of credit they issue? Is there some kind of ratio they use to determine the level of reserves required to credit outstanding?


My sense is that loan volume is determined by the upstream demand for reselling that debt; the market conditions for commercial paper is a much bigger factor in annual / quarterly issuance than whatever the current reserves of those institutions are.

This is why private equity is currently sitting on an uncomfortable time bomb: they have trillions of debt instruments on their books and the market is drying up fast.
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Re: The Covid19 New World Order and the World Economic Forum

Postby drstrangelove » Sun Aug 14, 2022 1:39 pm

The volume of credit is easily driven up from the supply side through cost of living and plain old consumerism. The demand for the bonds can be handled passively by the funds like vanguard and blackrock. the debt gets a fraudulent rating from either moodys/standard&poors and eventually finds its way into bond etfs bought up by pension/sovereign wealth funds all round the world.

it seems to me they want to scare people out of stocks and into bonds, then have corporations just default on all that commercial paper like what's happening in china right now.
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