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Michael Maharrey

Articles by Michael Maharrey

Fed Still Running Repo Operations; Will They Ever End?

15 days ago

Sometimes it’s a lot easier to sit down at the table than it is to fold your hand and leave.Nearly four months after it started, the Federal Reserve continues to run overnight repo operations and it’s unclear when the central bank will actually end these “emergency” measures.The Fed stepped into the repo markets last September to “unplug” the financial system’s “plumbing” with an injection of cash. It was the first such move since the financial crisis a decade ago. The move stabilized the markets, but months later, it doesn’t appear the Fed has a viable exit strategy.Repurchase operations are an important aspect of the banking system. The repo market enables banks to borrow cash in order to maintain liquidity and meet daily needs. In a repo trade, banks and other firms use Treasurys and

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Fun on Friday: Bust That Piggy Bank!

19 days ago

Did you have a piggy bank when you were a kid?I did. And it almost never had anything in it. I would drop a few coins in now and then. Every once in awhile, I even stuffed some paper money in there. But usually within a week or two, I’d be prying the bottom off that thing and pulling out those coins and paper for an important purchase. By important purchase, I mean buying candy bars or baseball cards.My mom tried to teach me to save. Her failure is no reflection on her commitment to the task. It just didn’t take. I’ve always had what economists call a high time preference. I am more concerned about my current well-being than the future. To put it in non-economist terms, I liked stuff more than cash.Now, my son – he’s the opposite. When he was a kid he always had money. When we’d go on

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Fun on Friday: I Hereby Resolve…

26 days ago

We’re less than a week away from New Years Day and I already have my 2020 resolution queued up and ready to go.Wanna know what it is?I hereby resolve not to make any New Year resolutions!There is a big advantage in going this route — I’m virtually guaranteed to succeed in my in the resolution department in 2020. I mean, it is highly unlikely that I’ll accidentally slip up and make a resolution.In fact, I didn’t make a single resolution last year and I can confirm that I didn’t break any either. After all, you can’t break a resolution you don’t make.Just consider that your last bit of wisdom for 2019.You’re welcome.Look. Let’s get down to the nitty-gritty. If you make a resolution, you aren’t going to keep it. I’m not questioning your intentions … just your willpower. I mean, I don’t

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A Trend Worth Considering – The Price of Gold Since 1971

December 23, 2019

As we approach the end of 2019, gold is on track for a healthy yearly gain. To date, the yellow metal is up over 16% on the year.It’s always interesting talking about gains in the price of gold because when you get down to it, it all depends on when you got into the market. If you bought an ounce of gold on Jan. 1 of this year and sold it this morning, you’d have pocketed around $208 (less any taxes and fees). But if you bought your gold at the peak price this year and sold it this morning, you’d be out about $68.So, when we say gold is up or down, you always have to ask a second question: since when? The price can be simultaneously up and down at the same moment depending on the answer to that question.I occasionally get comments on articles posted on the SchiffGold Facebook page by

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Fun on Friday: Moving Is Awful

December 6, 2019

Moving is awful.I’m speaking from recent experience. We are in the process of moving from central Kentucky to northern Florida. I say “in the process” because you don’t just move. It consumes your life for months on end.It starts with the packing. We began packing stuff up over the summer. Every time I thought we were making progress, new stuff appeared. I’m pretty sure stuff was multiplying. We had a garage sale. We drug stuff to the curb. We gave a lot of our furniture to my daughter.And then I would walk into a room – more stuff.Even after the great purge, we still completely packed a 20′ U-Haul with stuff. That required a full day of lift and tote coupled with puzzle-solving skills. To my dismay, I discovered my stuff is not symmetrical. When it was all said and done, I had a tangle

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Peak Irony: Fed Paper Admits Fed Policy Can Lead to Economic Ruin

November 27, 2019

A paper  by Scott A. Wolla and Kaitlyn Frerking for the Federal Reserve Bank of St. Louis warns that the Fed’s own policy could lead to “economic ruin.”The paper titled “Making Sense of National Debt” explains the pros and cons of national borrowing in typical Keynesian fashion. In a nutshell, a little debt is a good thing, but too much debt can become a problem.But in the process of explaining national debt, Wolla and Frerking stumble into an ugly truth — Federal Reserve money printing can destroy a country’s economy.So, when does the national debt become a problem?According to Wolla and Frerking, debt only becomes an issue when it outpaces GDP, or national income, as they call it. If debt grows at a faster rate than income, eventually the debt might become unsustainable.They note that

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Fun on Friday: Golden Music to My Ears

November 15, 2019

People spend a lot of money for headphones and earbuds. I totally get it. I’m a bit of an audiophile myself. There’s nothing like good music played through good-sounding headphones. But in my never-to-be-humble opinion, a lot of the high-end headphones are utter crap. This is because of the obsession with boosting the bass.Hey! Whoever just said, “OK boomer,” I heard that! And I’m not a boomer. I’m an X-er. So turn up the Nirvana. Anyway, these headphones that pump up the bass tend to make everything in the lower range sound muddy. I suppose if you just want to hear “thump-thump,” it’s great. But I’d prefer to actually experience the full range of sound. Of course, maybe this doesn’t matter since a lot of modern music doesn’t have a full range of sound.Yikes. Maybe I do sound like a

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Powell Lectures Congress About Government Spending the Fed Facilitates

November 14, 2019

Fiscal 2020 started just like fiscal 2019 ended – with a massive federal budget deficit. And that has Federal Reserve Chairman Jerome Powell worried. In an ironic bit of political theater, Powell lectured Congress about the spending he helps facilitate.The budget shortfall last month was 34% higher than the October 2018 deficit, coming in at $134.5 billion, according to the latest Treasury Department report. That starts fiscal 2020 off on track to eclipse a $1 trillion deficit.The October deficit continues a well-established trend. The FY2019 deficit was $984 billion and ranked as the largest budget shortfall since 2012. The federal deficit has only eclipsed $1 trillion four times, all in the aftermath of the 2008 financial crisis.The FY2019 deficit was 26% higher than FY2018’s massive

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Fun on Friday: Treasure Hunting!

November 1, 2019

Since moving to Florida, I’ve been able to spend a little bit of time on the beach. It’s interesting watching what people pick up. You can kind of categorize people based on their haul of beach-combing treasures.First-timers to the beach will basically pick up anything. Broken cockle-shells are worthy of the newbies’ treasure bag, as are sticks, feathers and generic rocks. Hey – it came out of the ocean. It’s probably a whale bone!Seasoned vacationers are more discerning. They’ll walk right over common seashells. More rare shells with cracks or flaws get picked up and discarded. And no rocks. They’ve got those at home.Then you have the locals. They generally aren’t picking up crap. Bending over is way too much trouble. An exceptional shell may warrant picking up. Or maybe not. The

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It’s a Global Rate-Cutting Frenzy

October 30, 2019

As I write this, the Federal Reserve is in the midst of its October FOMC meeting. The central bank is widely expected to cut interest rates another 25 basis points. If the Fed follows through, it will be the third cut in three meetings, totaling 75 basis points since July.Although the Fed continues to call this a “mid-cycle adjustment,” Peter Schiff called the rate cut in July the first one on the road to zero. There’s nothing so far to cast any doubt on that view.But the Fed is not alone. It joins the majority of the world’s central banks on a race to lower rates and inject more easy money into the world’s economy. As of this month, a total of 54 central banks in both developed and emerging markets have cut their policy/base interest rates.World Gold Council head of market intelligence

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Fun on Friday: Romance Scam!

October 25, 2019

Fun on Friday is supposed to be, well, fun. But I also like to offer useful advice. So this week, I have a tip for you. If your boyfriend or girlfriend wants you to send them a bunch of money in order to help them sell gold, don’t do it. It’s a scam.Seriously. Just don’t. Don’t send people you’ve never met money.Ever.You’re welcome.I bring this up because we have yet another guy busted for running a gold scam targeting lonely, vulnerable people — in this case women. According to reports from a Charlotte TV station, Suleman Alhassan and his posse targeted women through dating apps. He promised them romance and wealth.Look, I dabbled in online dating. I actually met my wife on Yahoo Personals. But overall, in my experience, you’re damn lucky if you get romance and you sure as heck aren’t

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Fun on Friday: What’s the Deal With Friday the 13th?

September 13, 2019

It’s Friday the 13th!You know what? It already seems lucky to me. Heck, it’s Friday. That’s a pretty good start!I’ve never been one to get all torqued up about the number 13 anyway. In fact, I kind of like it. My preferred hockey number is 33 in honor of Patrick Roy and just because it has nice symmetry. But if it’s not available, I’ll go with 13. Why not mock the number gods, right?Truth is I’ve never been particularly superstitious to begin with. Some people are though. I’ve known people who go through every Friday the 13th with a sense of abject dread. Not me. I figure a day is what you make of it. I’m not going to ruin a Friday worried about the number attached to it.Also, if you haven’t figured it out already, I’m a bit of a contrarian. I’m the kind of person who will walk under a

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Fun on Friday: When Is Fake News Fake News?

September 6, 2019

Did you know that has fact-checked the on multiple occasions? True story. In the obsession to root out “fake news,” fact-checking sites have resorted to fact-checking satire and parody articles.Apparently, some people actually believe satire articles are true. If you’ve ever watched people trying to operate a Walmart U-scan on a Saturday afternoon, this comes as no surprise. Still, it seems odd that a legit organization dedicated to fact-checking news would waste time with the . I mean, really? The name and cheesy graphics are enough of a giveaway.I don’t know. Maybe the people determining what is and isn’t fake news are fake news.Look, the way I see it, if people are dumb enough to believe Walmart is really going to discontinue auto parts sales to help lower traffic fatalities, then

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Fun on Friday: This Post Blows

August 30, 2019

As I write this, Hurricane Dorian is taking aim at Florida. What’s fun about that? you might ask. Well, nothing. And I don’t want to minimize the potential for disaster. But the hurricane hasn’t hit yet and the runup to a storm provides a lot of amusement and some educational moments. I just can’t resist.I’ll start with the good news! Florida is about to enjoy an ECONOMIC BOOM! If you believe the Keynesians that is. Now, if you have a shred of common sense, well, maybe it’s not such good news.Anyway, I live in Kentucky, but my mom lives north of Jacksonville and I spent about 20 years in the Tampa Bay area, so I tend to pay more attention to hurricanes than your average land-locked Joe. I’ve got the National Hurricane Service saved to my favorites toolbar, and like most Floridians, I

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Fun on Friday: Just Say No to Gas Station Gold

August 23, 2019

Here’s a tip for you.If some guy comes up to you in a gas station parking lot and tries to sell you gold, don’t buy it.Seriously. Just say, “No!”Who would even buy gas station gold? You might ask.Well apparently, a lot of people.According to a report on Eyewitness News 3 in Hartford, Connecticut, one jewelry and coin dealer has had close two 20 people come in looking to sell fake gold they bought in a gas station parking lot.  Some 20 people coming into just one store.That’s a lot of suckers.Sue Couture works at Good Ole Tom’s in East Hartford. She says it’s easy to quickly identify the fake gold. Just stick a magnet to it. Gold isn’t magnetic. So, if you’re going to make a gas station parking lot gold purchase, at least bring a magnet with you.But really, I’d stick with my first

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Fun on Friday: I’m Spoiled…And Old

August 2, 2019

Confession time.I’m spoiled. And old.I knew this already, but this past week has magnified these truths.You see, I’m in Florida. And it’s been a tough week.That sentence alone probably proves to most of you that I’m spoiled — except for those of you who live here and are already tired of the summer heat and humidity. But when I say I’m literally a five-minute walk from the beach, most of you would probably trade places with me.As for being old – well – I’m in Florida.But I’m not here on vacation. I’m actually at my mom’s house. She’s had some health issues, so I came down to help her out with some appointments and whatnot. Now usually, when I’m here, it’s a vacation. I sit by the pool and chill on the beach. But this time, I had to work.Working away from home creates certain challenges

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It’s Bipartisan Fiscal Suicide!

July 30, 2019

Trump’s bipartisan spending deal took a step closer to reality last week when the US House passed a budget bill by a 284-149 vote.The bill increases discretionary spending from $1.32 trillion in the current fiscal year to $1.37 trillion in fiscal 2020 and then raises it again to $1.375 trillion the year after that. The deal will allow for an increase in both domestic and military spending.In other words, no spending cuts.The deal includes $320 billion in additional spending over existing law and simply suspends the debt ceiling until mid-2021.Poof. Debt ceiling eliminated. Just keep on borrowing, boys!This deal is a product of “bipartisan cooperation.” House Speaker Nancy Pelosi hammered out the deal with Trump’s Treasury Secretary Steve Mnuchin.Rep. Thomas Massie (R-KY)  used a

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Fun on Friday: Go Big or Go Home!

July 26, 2019

Why buy gold when you can just steal it?At least that’s how a group of men in Brazil figured it.Now, I’m not advocating theft here. But you have to give these guys credit for their moxie. They definitely subscribe to the “go big or go home” theory.According to a report, at least eight men were involved in the heist of approximately $30 million worth of gold and other precious metals at the São Paulo airport. The men disguised their trucks to make them look like Brazilian federal police vehicles. Surveillance footage shows at least four thieves getting out of one truck on the tarmac and forcing workers to load it with gold.According to the state news agency, the robbers got away with 1,653 pounds of precious metals. They ditched their trucks about 20 km from the airport.The gold was

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America Doesn’t Have a Wage Problem; It Has a Money Problem

July 23, 2019

The minimum wage debate obscures a more significant problem in America. We don’t primarily have a wage problem. We have a money problem. Government devaluation of the dollar over the years has stolen money from average Americans. But instead of dealing with the core issue, the fight centers around wage policy and offers solutions that will just exacerbate the problems.While we’re on the subject, a recent study by the Congressional Budget Office put a little bit of a damper on the “Fight for 15” minimum wage initiative.The nonpartisan government body projected that increasing the minimum wage would boost pay for about 17 million workers, but it would eliminate up to 3.7 million jobs. The median job-loss – the number you probably saw touted in headlines – was estimated at 1.3 million.The

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Fun on Friday: Forget Area 51; Storm the Fed!

July 19, 2019

So, are you planning on storming Area 51 this fall?You know, this is a thing, right?There’s a Facebook page and everything. And you know, if there’s a Facebook event page, it’s a real thing. So far, 1.7 million people have indicated they are going to the event on Sept. 20, and more than 1.3 million more are “interested” in seeing “them aliens.”Here’s how it’s going to go down, according to the event page.We will all meet up at the Area 51 Alien Center tourist attraction and coordinate our entry. If we naruto run, we can move faster than their bullets. Let’s see them aliens.”For those of you who don’t speak nerd, “naruto running” references the main character in a Japanese manga series called Naruto. I’m not going to try to explain this any further, because, well, I don’t really

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Fun on Friday: An Asteroid Filled With Fool’s Gold

July 12, 2019

Have you heard about the “gold” asteroid?You probably have. It’s been all over the news. Apparently, NASA is planning a mission to a Massachusetts-size lump of rock named “16 Psyche” located in the asteroid belt between Mars and Jupiter.There’s been widespread reporting that this mission could pave the way for asteroid mining. And that’s led to speculation that it could make us all rich!This is dumb.A headline in screamed, “MIDAS ROCK Giant golden asteroid contains enough heavy metals to make everyone on Earth a billionaire – and Nasa is heading there in 2022.”On a side-note, whenever I hear the world “Midas,” I think muffler. Muffler rock. That doesn’t make much sense.Anyway, this lump of space rock is going to turn us all rich and probably also foster world peace. According to , the

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Fun on Friday: 2020 Olympic Athlete Will Compete for…E-Waste?

July 5, 2019

So athletes in the 2020 Olympics are going to be competing for junk.No joke. The medals for the Tokyo games will be made entirely out of recycled e-waste.According to a little blurb published by the Silver Institute in its most recent edition of , the folks planning for the 2020 Olympics have collected enough silver, gold and bronze (copper and tin) from e-waste to make all of the medals for the games.It’s mostly silver. Yes – gold medal winners get hosed. According to Olympic Committee rules, gold medals must contain a minimum of 6 grams of gold. That’s it. They’re primarily made of silver. As it turns out, there really isn’t that much difference between first and second place.Anyway, the Japanese have collected 9,000 pounds of silver, 67 pounds of gold and 6,000 pounds of bronze.

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How the Fed Wrecks the Economy Over and Over Again

June 26, 2019

When people talk about the economy, they generally focus on government policies such as taxation and regulation. For instance, Republicans credit President Trump’s tax cuts for the seemingly booming economy and surging stock markets. Meanwhile, Democrats blame “deregulation” for the 2008 financial crisis. While government policies do have an impact on the direction of the economy, this analysis completely ignores the biggest player on the stage – the Federal Reserve.You simply cannot grasp the economic big-picture without understanding how Federal Reserve monetary policy drives the boom-bust cycle. The effects of all other government policies work within the Fed’s monetary framework. Money-printing and interest rate manipulations fuel booms and the inevitable attempt to return to

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Fun on Friday: Hard Rock Cafe Goes for Gold

June 21, 2019

From time to time, I write about gold-covered food. Why? Because it’s a thing – a weird thing. It involves gold – which is what we do here. It comes up a lot in my daily Google searches for gold news. And did I mention I find it kind of weird?Really, I don’t understand the thrill of eating gold. I like to invest in gold. I like to wear gold. I like to look at pretty golden things. But eat gold? Nah. Really, it’s a hard pass for me. (There’s a joke there that I’m not going to explain – just think about it a second…hard pass.)I do kind of get the appeal though. A lot of people like to eat gold because it makes them feel like they’ve made it. It makes them feel rich and decadent. If you can afford to eat gold, well, you must have “arrived.”For the most part, it’s a hoity-toity kind of

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The Fed Isn’t the Only Game in Town: The ECB Takes a Decidedly Dovish Turn

June 19, 2019

All eyes will focus on the Federal Reserve as it wraps up its June meeting. But it’s important to remember the Fed isn’t the only game in town. Moves by the European Central Bank also have a significant impact on the global economy (and the gold market) and it has taken a decidedly dovish turn.Most analysts expect the Fed to hold interest rates steady in June, but potentially set the stage for a July rate cut. (Although Jim Grant said he thinks the Fed will actually cut this month.)In some way, Federal Reserve Chairman Jerome Powell is backed into a corner. On the one hand, any hint that a rate cut is off the table would likely tank already shaky stock markets. The markets have been juiced for weeks in anticipation of more easy money heroin. On the other hand, an excessively dovish tone

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China Urges International Community to Find Alternatives to ‘Weaponized’ US Dollar

June 18, 2019

In an opinion piece published yesterday, a Chinese government newspaper called for the international community to find alternatives to the global dollar system and warned “capricious actions” by the United States government could “ruin the future of the dollar itself.”This is yet another sign that the world is getting tired of the US weaponizing the dollar. We’ve been reporting on efforts by countries like Russia and China to minimize their exposure to the dollar, and we’ve speculated that ultimately these countries would like to dethrone the greenback from its perch as the world’s reserve currency. The article is interesting because it puts these goals in stark, unambiguous terms.The focused on tensions between the US and Iran, and the economic sanctions imposed by the Trump

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Fun on Friday: You Snooze, You Lose

June 14, 2019

Well, you missed out. You could have been $100,000 richer. But you didn’t plunk down $25 for a map. And you’re probably not in Canada.Too bad. As my dad used to say, “When you snooze, you lose.”But a few people did cash in on a treasure hunt up in the Great White North. And those folks are $100,000 better off for their efforts.A company called GoldHunt launched treasure hunts in Vancouver, Calgary, and Edmonton. For $25, you could buy and a map, and for $20 more, you could get a map that included clues. The payoff – $100k in gold and silver.A family in Edmonton found the treasure there in just 20 hours. It took the other folks a bit longer. The Vancouver treasure was the last to be unearthed. It took Marko Cerda just over a week to figure out the clues and dig up the chest.So, who is

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Fun on Friday: Finders Weepers; Losers Keepers?

June 7, 2019

And they say crime doesn’t pay.Remember the South Korean custodian who found gold bars in the garbage can at the  Incheon International Airport? I wrote about it a little over a year ago. The real travesty is that the janitor who found the gold probably won’t get a dime. It was a sad case of finders weepers.Well, the story has another twist. It seems it may be losers keepers.So, our intrepid custodian was emptying the trash when he/she found seven gold bars. They are valued at around $300,000 based on current exchange rates. Now, you might think a little reward would be in the offering for the honest employee who found the gold and turned it in.Nope.South Korea has what’s known as a “finders keepers” law. If you find an article and it’s not reclaimed you get to keep at least a portion

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Fun on Friday: There’s Gold In Dem Der Leaves!

May 31, 2019

Calvin and Hobbs ranks as my all-time favorite comic strip. Calvin said and did a lot of the things that went through my head when I was a kid. But of course, I was too chicken to do or say most of those things.If you’re familiar with the strip, you know Calvin’s imagination sometimes intertwined with reality to create some really weird scenarios. Well, I’ve got a real-life story for you that kind of reminds me of a Calvin and Hobbs strip.But before we get to reality, I need you to use your imagination.Picture this: Calvin and Hobbs are walking through the forest on a brisk fall day. The leaves have changed and they are fluttering to the ground all around our dynamic duo. Calvin has a shovel slung over his shoulder. Eventually, Calvin stops underneath a tree with bright golden leaves,

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When It Comes to the Trade War, Don’t Forget to Count the Cost

May 22, 2019

In a recent article, Peter Schiff called the ongoing trade war Pres. Trump’s last stand, saying, “it looks to me that Donald Trump … is charging into an economic version of the Little Bighorn.” Proponents of the trade war argue that we need to give Trump’s strategy time to work. They say the tariffs will force the Chinese to bend, and in the end, America will find itself in a much better economic position than it was before.We can debate whether Trump’s tariffs are a brilliant negotiating tool or an economic disaster, but we shouldn’t ignore the fact that they are causing significant pain. And not just for the Chinese. Ultimately, American consumers are paying the price.If you are a regular listener to the Friday Gold Wrap podcast, you have heard me say over and over again that we

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