Amazon has introduced a groundbreaking biometric payment system, Amazon One, which allows users to pay for purchases, access loyalty rewards and enter certain restricted areas on Amazon properties all with the wave of a hand. Users who sign up agree to give Amazon data regarding their palm’s unique vein patterns to help verify their identities.
Launched last March 28, this technology is already being used at over 200 Whole Foods locations across 20 states, and Amazon plans to expand it to every Whole Foods in the United States by the end of the year. (Related: More businesses now resorting to BIOMETRICS so that government nannies can literally track everything you do, see and buy.)
The technology is also being adopted by other retailers, such as Panera Bread – appearing in diverse locations like airports, convenience stores, gyms and stadiums.
In a similar manner, TSA has introduced facial recognition technology at airports with a promise that the technology enhances safety and streamlines the travel experience.
Facial recognition is used by the TSA to verify a traveler’s identity by scanning their face. This system captures a live image of the traveler’s face and compares it to the photo on their ID or passport. If the two images match, the traveler is cleared to proceed – often without needing to show physical identification.
For travelers who choose not to use this technology, the TSA continues to offer traditional ID checks. Participation in the facial recognition program is entirely voluntary and those who opt out will not face any delays or negative consequences.
Facial recognition is not just limited to airport security. It is being adopted across various industries, including banking, retail and healthcare – promising benefits like faster service, improved accessibility and a more personalized user experience.
However, as the technology becomes more widespread, so do the risks. These risks include inaccuracies and biases against certain age groups and ethnicities, the vulnerability of stored facial data and the possibility of criminal entities impersonating other individuals.
Hafiz Malik, a cybersecurity professor at the University of Michigan, cautioned that these systems are not infallible. Malik pointed out that advancements in artificial intelligence (AI) could potentially enable the creation of fake versions of a person’s voice, handprint or even face.
These AI-generated forgeries could be used to trick biometric payment systems, highlighting the need for robust countermeasures like “liveness detection” – a technology used by Amazon to distinguish between real and fake palms.
Another significant concern is the storage and protection of biometric data. Unlike a stolen credit card, which can be replaced, biometric data can’t be changed if it is compromised. This permanence makes biometric data a highly attractive target for hackers.
Evan Greer, director of the digital rights advocacy group Fight for the Future, warned that trusting a corporation with biometric data also entails trusting that same corporation to keep that data safe. He said corporations have a really terrible track record of keeping people’s personal information safe.
Cynthia Rudin, a Duke University professor, further stressed the potential dangers if such sensitive data falls into the wrong hands.
“They can control you in ways you don’t like,” said Rudin. “Those data sets can be used to control us anywhere in the world, including arresting us, or preventing us from entering stores that don’t want customers in our salary bracket, or who have political views that disagree with the owners of the venues.”
Watch this demonstration of an Amazon One palm scanner.
This video is from the Daily Videos channel on Brighteon.com.
Sources include:
]]>The problems started long ago and are political in nature. And the latest news also shows that political decisions attempting to quickly improve such situations can create even bigger problems in the medium or long term.
Let’s look at two news items from Germany that hold lessons for America. The first is that Germany, known as a high-savings country, is now entering a wave of “de-saving.” Between 10 and 15% of bank customers have overdrawn their accounts, 40% of Germans say they have had to draw on assets in the past year, and a third say they are no longer able to save for retirement as they used to. The savings rate has fallen from 11.3 to 10.6%.
Of course, this hits harder those whose real wages have fallen since 2019 and the middle class, which has had to spend more to maintain its existing living standard in the face of inflation. This is not yet an oppressive problem but should cause concern with regard to German citizens’ future financial independence.
The second news item concerns the German government’s response to what the loss of purchasing power has meant for the weakest in society. The “citizens’ basic income” (a basic, guaranteed income for the unemployed) is set to rise by 12% to 563 euros per month, irrespective of rent and heating cost subsidies or other transfers citizens already receive from the government.
This support, while politically helpful, creates a dangerous imbalance that could have a fatal effect on the economy. If the amount of the citizens’ basic income de facto equals or even exceeds a possible earned income, this could not only lead to false incentives to not seek work, it certainly would lead to social tensions. After all, as calculations show, an unemployed citizens’ basic income recipient will henceforth have almost the same income as a low-income earner with a job.
Former economist and West German Chancellor Ludwig Erhard’s social market economy policy enabled Germans to create property and private wealth after World War II. At the beginning of the 2000s, with the introduction of the low-interest rate policy, a downward spiral began, reinforced by negative interest rate policies and the so-called unconventional monetary policy of the European and other central banks. In 2008, the worldwide financial market crisis brought enormous national debts to light.
Small- and medium-sized enterprises, which shoulder the burden of taxes and duties with their employees, are further restricted by high taxes and regulations.
COVID-19 policies, with their disastrous lockdowns and home office regulations, put additional burdens on labor and business location.
They also brought another imbalance to light: Large corporations like Amazon had an enormous advantage in distorted competition and, therefore, made huge profits at the expense of the stagnating European economy. This was because money for private consumption was distributed by government generously and with little targeting.
And now, another burden is to be borne by the German taxpayer: skyrocketing energy prices, which are due to the centrally managed “Energiewende” (green energy transition) and the irrational phase-out of nuclear power.
The political response, however, amounts to the same “solution” as at the turn of the millennium: printing money.
Once again, policymakers are relying on an illusion of economic growth. In reality, however, this path must lead to economic upheaval or collapse and sharply rising prices. This is always the case when the central bank becomes too active. Anyone who artificially triggers a boom by printing money will also cause a crash.
Politicians in Europe and America want to improve people’s well-being. But that requires foresight and the courage to completely rethink and break new ground. More of the above measures are not the solution.
“I don’t know what the hell that is, but it’s working,” Biden stated at a June 17 union rally in Philadelphia, begging the question: what is Bidenomics, and is it working?
According to a White House statement, Bidenomics rests on three pillars: massive “smart” government spending on renewable energy and semiconductors, support for unions and domestic manufacturing, and promoting competition. As a result, the White House states, “our economy has added more than 13 million jobs—including nearly 800,000 manufacturing jobs—and we’ve unleashed a manufacturing and clean energy boom.”
The Creating Helpful Incentives to Produce Semiconductors and Science (CHIPS) Act of 2022 allocates $280 billion in federal spending to bolster U.S. semiconductor manufacturing. The Infrastructure Act of 2021 allocated more than $65 billion for “clean energy” projects. And the 2022 Inflation Reduction Act allocated an additional $394 billion for clean energy in the form of tax incentives, loans, and grants.
“I would define it as trickle-down big government,” Jonathan Williams, chief economist at the American Legislative Exchange Council, told The Epoch Times. “The common thread of this administration has been growth and expansion of government power, and certainly big government spending.”
According to National Security Advisor Jake Sullivan, when Biden took office, “America’s industrial base had been hollowed out. The vision of public investment that had energized the American project in the postwar years—and indeed for much of our history—had faded.“
Sullivan, who, despite his focus on security issues, has become a spokesman for Bidenomics, has been highly critical of what has been called “Reaganomics,” or a platform of tax cuts, trade liberalization and deregulation.
“There was one assumption at the heart of all of this policy: that markets always allocate capital productively and efficiently,” Sullivan said during an April speech at the Brookings Institution.
“President Biden … believes that building a twenty-first-century clean-energy economy is one of the most significant growth opportunities of the twenty-first century,” he stated. “But that to harness that opportunity, America needs a deliberate, hands-on investment strategy to pull forward innovation, drive down costs, and create good jobs.”
Despite the administration’s argument that government is best positioned to direct private industry, some critics say that waste and failure are the hallmarks of government industrial policy.
“The government is not in the business of making good investments,” economist Arthur Laffer, a former advisor to Presidents Ronald Reagan and Donald Trump as well as U.K. Prime Minister Margaret Thatcher, told The Epoch Times. “That’s not what they should be doing,” he said.
“These guys are not good investors; they’re political investors,” Laffer said. The more the government seeks to influence the private sector, the more the private sector will orient itself toward producing what the government wants versus what consumers want.
“Bidenomics is nothing more than the application of government intervention to guide, direct and restructure the economy as the White House thinks it should be structured,” Steve Hanke, economics professor at Johns Hopkins University, told The Epoch Times.
“This type of interventionism flies under the rubric of ‘industrial policy.’ It’s where government picks winners and losers by using levers of government policy, like taxes subsidies, regulations, tariffs, quotas, and even outright bans.”
Recent examples of government ventures into private industry include Solyndra, a California maker of solar panels that received $535 million in federal loan guarantees from the Obama administration before going bankrupt.
Under Bidenomics, automakers are being pushed by a combination of consumer subsidies, manufacturing grants, and ever-tightening emissions regulations to switch their production from gasoline-powered cars and trucks to electric vehicles (EVs). However, there is scant evidence that enough consumers will switch to EVs to justify the investments or that carmakers will be able to source enough lithium, cobalt, and other minerals to build EV batteries in large quantities, or that the U.S. electric grid can build enough new generation capacity and connect enough charging stations to charge EVs at scale.
At the same time, the Biden administration is working to reduce domestic production of oil, gas, and coal in favor of wind and solar, with the same supply issues that automakers face. The required minerals for wind turbines and solar panels are typically mined in countries that may not be friendly to the United States, and it has created a heavy dependence on China, which controls most of the refining of these minerals.
According to Hanke, who served on Reagan’s Council of Economic Advisors, “Bidenomics is nothing new. Advocates of industrial policy in the 1980s used to latch onto Japan as a model for industrial policy, arguing that it contributed to Japan’s emergence as an economic power after World War II.
“But since the last three lost decades in Japan, the industrial policy advocates have gone radio silent,” Hanke said. “It’s hard to imagine a more misguided way to make decisions than to put them in the hands of those who pay no price for being wrong.”
To date, the Biden administration has overseen more than $4 trillion in new spending, of which $1.6 trillion was passed by Congress on a partisan basis, $1.4 trillion was passed on a bipartisan basis, and another $1.1 trillion came from Biden’s executive actions. Despite this spending, the White House claimed in March that “the President’s Budget improves the fiscal outlook by reducing the deficit by nearly $3 trillion over the next decade.”
The Congressional Budget Office (CBO) sees it differently, however.
“Under the President’s FY 2023 budget, the debt would grow be allowed to grow by $16 trillion over ten years, or $50,000 of debt per American citizen,” the CBO reported in March. “Under CBO’s current projections, the gross federal debt would increase from $31 trillion today (123 percent of GDP) to $52 trillion (132 percent of GDP) in 2033.”
“Probably the worst part of Bidenomics is the enormous increase in spending,” Laffer said. “I never could have guessed anyone would have overspent like that.
“If you look at the national debt-to-GDP or any other measure, it’s gone way, way up,” he said. “This is an egregious reversal of what would be good economics.”
“Forty years of handing out excessive tax cuts to the wealthy and big corporations had been a bust,” Biden stated. By contrast, Bidenomics “is about building an economy from the bottom up and the middle out, not the top down.”
While most of the tax hikes that Biden called for have so far failed to get through Congress, critics argue that Americans have experienced significant tax hikes nonetheless, due to another economic phenomenon to carry the president’s name: “Bidenflation.”
“The inflation that has come in under Biden has pushed capital gains tax rates way up, because we have illusory capital gains that are now subject to capital gains taxation,” Laffer said. Because of inflation, he said, the nominal value of assets has increased dramatically, even though in terms of purchasing power “it’s the same thing.”
This results in a “tax on the illusory capital gains,” he said. Inflation has also pushed Americans into higher income tax brackets, despite the fact that wage gains often failed to keep up with rising prices, leaving Americans poorer but facing higher tax liabilities.
“If you look at the corporate rate, it’s still what it was when Trump left; and as you look at the personal income tax rates, 37 percent is still the highest,” Laffer said. “But if you look at all the inflation induced tax rate increases, they’ve been quite substantial.”
And this is in addition to the effective tax of inflation itself, which drives up the cost of goods and services as the dollar loses its value. Inflation was cited as the main reason why 76 percent of Americans polled in an Associated Press-University of Chicago survey in May had a negative view of Biden’s economic policies.
“There’s nothing that can bring the economy to its knees faster, and more damagingly, than an unhinged paper currency and high inflation,” Laffer said.
Under Bidenomics, the White House asserts, “America has seen the strongest growth since the pandemic of any leading economy in the world. Inflation has fallen for 11 straight months and has come down by more than half.”
As is often the case with statistics, however, the time period you consider colors what the numbers show. While the official inflation rate, according to the consumer price index (CPI), came down from a high of 9.1 percent in June 2022 to the current rate of about 4 percent, it remains well above pre-pandemic levels of below 2 percent.
Many attribute escalating prices to unprecedented levels of government spending, coupled with policies that discouraged the production of oil and gas, driving up the cost of gasoline and diesel, fertilizer, food, and transportation, although the Biden administration has blamed the Russian invasion of Ukraine.
The story is similar to economic growth under Biden. After U.S. GDP fell by 2.8 percent in 2020 due to the COVID-19 pandemic and government lockdowns, America’s economy roared back to a positive 5.9 percent GDP growth in 2021 once lockdowns were lifted and businesses rushed to rehire laid-off workers.
Following this burst, however, the United States has underperformed against most other industrialized countries. While the average global GDP growth rate for 2022 was 3.1 percent, according to the World Bank, the U.S. GDP growth rate in 2022 lagged behind the rest of the world at 2.1 percent. Among “leading economies,” the U.K.’s GDP grew by 4.1 percent; France’s by 2.6 percent; Sweden’s by 2.6 percent; Spain’s by 5.5 percent; Mexico’s by 3.1 percent; and Canada’s by 3.4 percent. Germany, at 1.8 percent, was one of the few industrialized countries that underperformed the United States.
Notably, GDP also includes government spending, which hit record levels under the Biden administration.
According to the White House statement, “under Bidenomics, the unemployment rate fell below 4%,” and the abundance of jobs is certainly one of the bright spots of the current economy. Here too, however, critics say there are clouds.
The labor participation rate, which is the percentage of able-bodied people seeking work, hit a high mark just above 67 percent in the year 2000. It fell to a low of 62.5 percent in 2015, before climbing back to 63.3 percent in 2020, under Trump. It then plummeted to 60 percent during the pandemic and is currently at 62.6 percent under Biden, the same level as during the Obama administration.
Many blame an expansion of social programs and unemployment benefits for the number of Americans leaving the labor market. This also makes the unemployment rate seem lower because those not even seeking work are not counted in unemployment statistics.
“Encouraging people not to work has reduced the unemployment rate, that’s true,” Laffer said. “It’s also reduced the participation rate. It’s reduced both the employment rate and the unemployment rate, which is the antithesis of what we want in a healthy economy.”
Biden claimed that tax cutting under Reagan only benefitted the rich and “hollowed out the middle class.” By contrast, a central pillar of Bidenomics is “empowering and educating workers to grow the middle class,” according to the White House statement.
But some economists argue that Biden has it backwards, that government intervention makes the private economy even more of an insider game at the expense of everyday Americans.
“The one thing we know for certain about big government and more government spending is that it provides a gravy train for the super-rich, rent-seeking class,” Hanke said.
“The surge in government spending over the last five years has resulted in a huge jump in U.S. billionaires’ wealth, from 15 to 18 percent of GDP,” he said. “So much for the equity arguments that are draped over Bidenomics.”
“The best way to make profits today in the private sector is to lobby the government for a contract or a regulation to help you,” Laffer said. “If you tell a business that was profit-focused, that you can make the most profits by lobbying government, of course, they’re going to do that.”
The other major component of Bidenomics is a sharp increase in government regulation. This includes new draconian emissions regulations from the Environmental Protection Agency (EPA), new appliance regulations from the Department of Energy (DOE), and new Securities and Exchange (SEC) requirements for producing audited reports on CO2 emissions for all listed companies.
A June report by the Committee to Unleash Prosperity estimated that the added costs of new Biden administration regulations, “which include both their current and expected future costs, amount to almost $10,000 per household.” By contrast, the Trump administration reduced regulatory costs on Americans by $11,000 per household, the study stated.
The report stated that, as reported by federal agencies themselves, the cost of new regulations they were implementing under Biden summed to $173 billion per year, although the report estimated that the costs were actually much higher, at $616 billion per year.
Beyond costs, critics charge that the Biden administration has been particularly aggressive in attempting to centralize authority within federal agencies at the expense of local government.
“One of our greatest criticisms of this administration’s policy agenda is that everything has the common thread of trying to federalize decisions in Washington, and central government versus allowing the states to compete with each other,” Williams said. The Biden administration is “changing the incentive structure for many states in favor of a big government agenda.”
Historically, American states have been free to compete with each other on policies, and this has allowed for experimentation in terms of what works best. Business and workers typically respond by investing in and relocating to states that provide the most attractive conditions in terms of living costs, tax rates, regulations, and quality of life, and the last several years has seen a flood out of progressive states like California, New York, and Illinois, in favor of conservatives states like Texas and Florida.
“[Biden’s] policy agenda has been to undermine state autonomy and federalism wherever possible, whether that is federalizing elections, banning state right-to-work laws [or] telling states you can’t cut taxes if you take federal bailout dollars,” Williams said. “The Biden administration has flooded state budgets with unprecedented amounts of federal aid.
“While that federal aid is temporary, the strings that are attached to it are not temporary.”
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Article cross-posted from our premium news partners at The Epoch Times.
]]>At about 1 a.m. Monday, hours after the Federal Deposit Insurance Corporation had been expected to announce a buyer for the troubled regional lender, government officials informed JPMorgan executives that they had won the right to take over First Republic and the accounts of its well-heeled customers, most of them in wealthy coastal cities and suburbs.
But the resolution of First Republic has also brought to the fore long-running debates about whether some banks have become too big to fail partly because regulators have allowed or even encouraged them to acquire smaller financial institutions, especially during crises.
‘Regulators view them as adults and business partners,’ said Tyler Gellasch, president of Healthy Markets Association, a Washington-based group that advocates greater transparency in the financial system, referring to big banks like JPMorgan. ‘They are too big to fail and they are afforded the privilege of being so.’
He added that JPMorgan was likely to make a lot of money from the acquisition. JPMorgan said on Monday that it expected the deal to raise its profits this year by $500 million.
JPMorgan will pay the F.D.I.C. $10.6 billion to acquire First Republic. The government agency expects to cover a loss of about $13 billion on First Republic’s assets.
Normally a bank cannot acquire another bank if doing so would allow it to control more than 10 percent of the nation’s bank deposits — a threshold JPMorgan had already reached before buying First Republic. But the law includes an exception for the acquisition of a failing bank.”
Why should we care about this? Isn’t the massive graft of crony capitalism an everyday event? We should care because this takeover is just the tip of the iceberg. Our whole banking system might be insolvent. Manuel Garcia Gojon points out, “The taming of monetary policy necessary to slow price inflation has triggered a corrective trend in the valuation of financial instruments. Many big banks in the United States have substantially increased their use of an accounting technique that allows them to avoid marking certain assets at their current market value, instead using the face value in their balance sheet calculations. This accounting technique consists of announcing that they intend to hold such assets to maturity.
As of the end of 2022, the bank with the largest amount of assets marked as ‘held to maturity’ relative to capital was Charles Schwab. Apart from being structured as a bank, Charles Schwab is a prominent stockbroker and owns TD Ameritrade, another prominent stockbroker. Charles Schwab had over $173 billion in assets marked as ‘held to maturity.’ Its capital (assets minus liabilities) stood at under $37 billion. At that time, the difference between the market value and face value of assets held to maturity was over $14 billion.
If the accounting technique had not been used the capital would have stood at around $23 billion. This amount is under half the $56 billion Charles Schwab had in capital at the end of 2021. This is also under 15 percent of the amount of assets held to maturity, under 10 percent of securities, and under 5 percent of total assets. An asset ten years from maturity is reduced in present value by 15 percent with a 3 percent increase in the interest rate. An asset twenty years from maturity is reduced in present value by 15 percent with a 1.5 percent increase in the interest rate.
The interest rates for long-term financial instruments have remained relatively stable throughout the first quarter of 2023, but this may be subject to change as many of the long-term assets of recently failed Silicon Valley Bank and Signature Bank must be sold off for the Federal Deposit Insurance Corporation to replenish its liquidity. The long-term interest rate is also heavily dependent on inflation expectations, as with higher inflation a higher nominal rate is necessary to obtain the same real rate. It is also important to remember that the US Congress has persisted in not raising the debt ceiling for the government, which is currently projected to not be able to meet all its obligations by August. This could impact the value of treasuries held by the banks.
Other banks that may be close to an effective insolvency include the Bank of Hawaii and the Banco Popular de Puerto Rico (BPPR). The Bank of Hawaii’s hypothetical shortfall as of the end of 2022 already exceeded 60 percent of its capital. The BPPR has over double its capital in assets held to maturity. All three banks—Bank of Hawaii, BPPR, and Charles Schwab—have lost between one-third and one-half of their market capitalization over the last month.
It is difficult to say with certainty whether they are indeed secretly close to insolvency as they may have some form of insurance that could absorb some of the impact from a loss of value in their assets, but if this were the case it is not clear why they would need to employ this questionable accounting technique so heavily. The risk of insolvency is currently the highest it’s been in over a decade.
Central banks can solve liquidity problems while continuing to raise interest rates and fight price inflation, but they cannot solve solvency problems without pivoting monetary policy or through blatant bailouts, which could increase inflation expectations, exacerbating the problem of decreasing valuations of long-term assets. In the end, the Federal Reserve might find that the most effective way to preserve the entire system is to let the weakest fail.”
What is the answer to continued bank failures and insolvency? We need radical reform of the banking system, and the great Murray Rothbard has just what we need. “But in what sense is a bank ‘sound’ when one whisper of doom, one faltering of public confidence, should quickly bring the bank down? In what other industry does a mere rumor or hint of doubt swiftly bring down a mighty and seemingly solid firm? What is there about banking that public confidence should play such a decisive and overwhelmingly important role?
The answer lies in the nature of our banking system, in the fact that both commercial banks and thrift banks (mutual-savings and savings-and-loan) have been systematically engaging in fractional-reserve banking: that is, they have far less cash on hand than there are demand claims to cash outstanding. For commercial banks, the reserve fraction is now about 10 percent; for the thrifts it is far less.
This means that the depositor who thinks he has $10,000 in a bank is misled; in a proportionate sense, there is only, say, $1,000 or less there. And yet, both the checking depositor and the savings depositor think that they can withdraw their money at any time on demand. Obviously, such a system, which is considered fraud when practiced by other businesses, rests on a confidence trick: that is, it can only work so long as the bulk of depositors do not catch on to the scare and try to get their money out. The confidence is essential, and also misguided. That is why once the public catches on, and bank runs begin, they are irresistible and cannot be stopped.
We now see why private enterprise works so badly in the deposit insurance business. For private enterprise only works in a business that is legitimate and useful, where needs are being fulfilled. It is impossible to ‘insure’ a firm, even less so an industry, that is inherently insolvent. Fractional reserve banks, being inherently insolvent, are uninsurable.
What, then, is the magic potion of the federal government? Why does everyone trust the FDIC and FSLIC even though their reserve ratios are lower than private agencies, and though they too have only a very small fraction of total insured deposits in cash to stem any bank run? The answer is really quite simple: because everyone realizes, and realizes correctly, that only the federal government – and not the states or private firms – can print legal tender dollars. Everyone knows that, in case of a bank run, the U.S. Treasury would simply order the Fed to print enough cash to bail out any depositors who want it. The Fed has the unlimited power to print dollars, and it is this unlimited power to inflate that stands behind the current fractional reserve banking system.
Yes, the FDIC and FSLIC ‘work,’ but only because the unlimited monopoly power to print money can ‘work’ to bail out any firm or person on earth. For it was precisely bank runs, as severe as they were that, before 1933, kept the banking system under check, and prevented any substantial amount of inflation.
But now bank runs – at least for the overwhelming majority of banks under federal deposit insurance – are over, and we have been paying and will continue to pay the horrendous price of saving the banks: chronic and unlimited inflation.
Putting an end to inflation requires not only the abolition of the Fed but also the abolition of the FDIC and FSLIC. At long last, banks would be treated like any firm in any other industry. In short, if they can’t meet their contractual obligations they will be required to go under and liquidate. It would be instructive to see how many banks would survive if the massive governmental props were finally taken away.”
We must do everything we can to end our corrupt monetary system, which threatens to bring down our economy through runaway inflation and bank insolvency. We need to restore the gold standard and end the Fed.
Llewellyn H. Rockwell, Jr. [send him mail], former editorial assistant to Ludwig von Mises and congressional chief of staff to Ron Paul, is founder and chairman of the Mises Institute, executor for the estate of Murray N. Rothbard, and editor of LewRockwell.com. He is the author of Against the State and . Follow him on Facebook and Twitter.
Article cross-posted from Lew’s Blog.
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