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Source link: http://archive.mises.org/16594/the-morals-issues-of-money/

The Moral Issues of Money

April 22, 2011 by

Debasement in the service of the state is not a fairytale. This is not a conspiracy theory. This is real life. FULL ARTICLE by Gabriel M. Mueller

{ 41 comments }

Iain April 22, 2011 at 8:56 am

This really makes me wonder about the supposed crash of 2008. Was it actually created by the bailouts, or threats of bailouts? What i mean is, did the government need some extra cash, so they stoked the flames of some market crash or failure in order to print up the new money?

Freedom Fighter April 22, 2011 at 9:28 am

“How is the citizen ever able to escape the injustice of his or her government? Such a thing is almost impossible.”

If the citizen would go on kid strike, stay single and refuse to make babies, sooner or later the government would have less humans to dominate. But humans cannot control their biological urges. Therefore, really, I blame nature, biology, God, the universe, whatever you want to call it. The government is just a bi-product of “God’s” tyranny over life.

Really, in fact, it’s the reversal of the pyramid of ages, the ripening of the population getting older and older which is causing the government to crumble. Pretty soon there will be one retired person for one worker. It will be non-sustainable.

The baby boom created the illusion that there would always be an every increasing large production of babies to foot the bill. Well, the production of babies has dwindled and exposed the whole generational ponzi scheme of social security.

If humans would stop breeding whenever they are dominated and not free, only the free people would reproduce and therefore the governments would have to negotiate better terms with their own population or rule on an old and unproductive population.

Stop making babies, go on kid strike, stay single with no kids and spend the money on yourself, not on a manipulative, hating woman eager to rob your money in a divorce lawsuit.

Here’s the best advice for responsible male libertarian:
http://www.youtube.com/watch?v=Ba0SFhRXdLE

Daniel April 22, 2011 at 12:25 pm

Adoption’s the best approach: it thwarts the state while giving some kid parents and a proper education.

Freedom Fighter April 22, 2011 at 2:01 pm

Please explain to me how adoption thwarts the state as opposed to breeding ?

Daniel April 23, 2011 at 2:15 am

Kid’s already alive and would probably remain alive regardless, so taking him for myself I don’t necessarily add to the ponzi scheme and my upbringing will make another misesian

Scarcity April 23, 2011 at 9:55 am

The government would just rape all the women to create more slaves.

x April 24, 2011 at 2:14 pm

That last part made it sound like you’re just bitter lol.

Drigan April 22, 2011 at 10:25 am

Great article! Since converting to Austrianism, I’ve thought the Bible seemed like it had some peculiarly sound views on money. This just gets added into the stack. :) Thanks!

Mr.huh? April 23, 2011 at 9:54 am

I’ve also noticed that it’s had some sound views on sexual responsibility as well.

Danbury April 22, 2011 at 12:16 pm

Of course Inflation is unethical and criminal. However, since very few people understand the cause & nature of monetary Inflation — they overwhelmingly fail to see the malicious human actors at its root.

Citing archaic, fictional Biblical text is an ineffective and quite silly approach to educating people on the serious economic topic of currency debasement IMO.

William April 22, 2011 at 1:33 pm

Too many people on this site are angry at religion. It’s sad really…

Freedom Fighter April 22, 2011 at 2:23 pm

“Too many people on this site are angry at religion. It’s sad really…”
Actually, I am more angry at God, YHVH, “I am that I am”.
Man invented religion, man did not invent God.

You see, God is the water which the Bible talks about. In genesis, when he says that he separates water from water, this means he makes individuals out of that fluid of life.
Then, on Jeremiah 5:22 he sets a sand barrier which water cannot cross.

God sets the limits. He defines us, makes us into limited species.

Then, on Ecclesiastes, he says that we have a silver Cord. Silver means dilution of power. We don’t have full powers and ownership of the life fluid contained in the golden bowl. We command the life fluid but with silver privileges, just like the medo-persian empire was of silver, a shared power, so is our life shared with God.

God wants to recover the life fluid once we die, he doesn’t want to depart from it.

God seems like all dictators on earth, obsessed by his power and does not want to lose it and wants to acquire ever more, hence the genesis passage about multiplying.

On the other hand, I claim a golden cord as opposed to a silver cord and I claim full ownership of the water in the golden bowl and I have absolutely no intentions to relinquish my spirit nor the water back to God, I intend to keep those for myself.

I don’t want to give back my soul to God just so he can recycle that into another creature. I want to be my own source of existence.

Speaking of libertarianism. If Christians blame the sad state of earth on sin and especially the original sin. I blame the sad state of life in the universe on lack of private property rights on your own soul. Life should own it’s own soul. And God should have a mutually agreed relationship with his creatures instead of a “love me and worship me or go to hell” attitude.

That’s why christianity and libertarianism don’t mix. What’s the point of being a libertarian and claiming full ownership of my house and paycheck if I don’t own my own soul.

If you don’t own the water, then you don’t own the dust.

Donald Rowe April 22, 2011 at 5:08 pm

“Life should own it’s own soul.”

Sometimes it is good to re-visit the circumstances that led us to the convictions we hold.

Everything is not always what it appears to be. Sometimes it’s better.

Cordially,
Don

nate-m April 23, 2011 at 8:07 pm

I don’t want to give back my soul to God just so he can recycle that into another creature. I want to be my own source of existence.

Biblical speaking: You don’t own your soul. God does. There is no such thing as ‘giving your soul to God’. He already has it. Many of us, if not most of us, retain the power to let God know what we would like to be done with it, I suppose.

But not everybody gets a choice.

Some people are too delicate for this world and thus awareness and spiritual is shut off from them. They are made ‘spiritually dumb’. Not stupid, just cut off. Spiritual matters will never make sense to them and no amount of education or teaching is going to change anything. Other people get screwed over so hard by other people around them that they never had a chance really. Still there are other people that made their decisions prior to this earth age…. God takes a much more active role and uses them as tools even if they are not aware of it completely.

But ultimately everybody gets a chance. Even if it is not in this world they will be given a chance in the next to make their decisions.

God seems like all dictators on earth, obsessed by his power and does not want to lose it and wants to acquire ever more, hence the genesis passage about multiplying.

Everything in this world is temporary. Everything rots away, everything turns to dust. One way or another. As humans there is nothing we can say, nothing we can do, and nothing we can build that will stand the test of time. It’s our relationships and decisions that will matter in the long run. It is because this world, this era in the history of earth and of the universe, exists for a purpose and when that purpose is done it will be reformed after a fashion. After that then things will get a bit more permanent.

God doesn’t need to worry about ‘gaining more power’, nor is he obesseed with it. He has as much as he wishes. A dictator did not will the country he is attempting to dominate into existence. Example: Stalin did not create Russia, nor did he create anything in Russia. God’s unique position as the original creator is one of the special things about being God and why there is a huge difference. Keep in mind that he _created_ you. He created you for the sake of having you exist in this universe. Because he wanted it. If he wanted nothing but power over you then he would have it. You’d be just a automaton. But, obviously, he wanted you the way you are. Otherwise he would of not had you created.

That’s why christianity and libertarianism don’t mix. What’s the point of being a libertarian and claiming full ownership of my house and paycheck if I don’t own my own soul.

Your money and your possessions are a requirement for existence in this reality. Our body has physical needs. Without the necessities of life you will die from starvation, exposure, sickness, etc. In order to use something you need to be in possession of it. The rules of ownership and property rights is how we determine the usage of the finite resources of this world. That’s the point of property rights. Who owns your soul is really irrelevant as far as libertarianism goes… property rights and libertarianism is worldly focused; your soul is supernatural. Once your dead what goods you owned in physical life is irrelevant, but it’s very important while you still exist in this physical body.

There are two major ways to gather goods you need:
a) Work hard and be honest and trust that everything you’ll need will be provided for/by you one way or the other.
b) be lazy, corrupt, and seek to ‘get something for nothing’. You use deceit, lies, and violence to get what you want instead of working for it and trusting.

Both Libertarianism and Christianity, in different manners, describe that while ‘choice A’ is not a sure fire winner in every case, in this world, it is generally a winning strategy in the long run. B is often quit successful strategy, but fails in the long run. Besides that there really is not a huge amount of overlap. They focus on different things and point of views. I could find you verses that go into how God told people that they would be miserable if they decide to go to a formal governmental structure under a king and a few other libertarian-leaning things, but this post is long and confusing as it is.

Oh. And religions do suck. Especially christian ones. Often the best lies are hidden in partial truths. Very often it’s not on purpose, although sometimes it is. Which is why it’s very important to check stuff out for yourself.

Freedom Fighter April 24, 2011 at 3:23 pm

“There is no such thing as ‘giving your soul to God’. He already has it.”

Fine then, I will just steal it from him, LOL :-D

“Who owns your soul is really irrelevant as far as libertarianism goes… ”

No, it’s fully relevant. Because if you own your own soul and are your own source of existence, then you can decide your species, time, sex, country, universe etc. If you don’t own your soul, you will not decide your state of being.

As a libertarian, the first private property that I claim is my soul, the first freedom that I claim is my soul.

Shay April 23, 2011 at 5:29 am

The biblical references are very valuable for citing when trying to explain the issue to someone who follows the bible. Personally I’m not religious and had no problem reading the article, and I still found the bible references illuminating, as it shows that debasement was common even back then.

Jason Young April 24, 2011 at 7:50 pm

I’m a very hardcore atheist/humanist and I found the article to be just fine. Religion isn’t going anywhere and I would rather all religions be interpreted in favor of liberty than authoritarian statism. Much of the Bible is perfectly compatible with an anarcho-capitalist or minarchist society, although I wouldn’t want to live in those societies as I’m afraid they would break down quickly into theocracies.

Mike Sproul April 22, 2011 at 4:02 pm

It would be OK to add to the stock of money by issuing copper money, iron money, salt money, etc. In fact, every commodity could be coined into money. Furthermore, nobody would object if people traded with paper certificates representing 100% reserve claims to copper, salt, etc. But let someone denominate their copper certificates in salt, even if the salt backing is worth several times as much copper as the certificate claims, and even if all parties agree to it, and suddenly the 100% reserve folks think they see fraud.

Freedom Fighter April 22, 2011 at 4:30 pm

How about a currency backed by Freedom, Dignity and Respect, as those seem to be the rarest commodities and resources on this planet, even rarer than gold and every day it’s being destroyed more and more by all sorts of regulations and interventions.

Surely, by the fact that Freedom, Dignity and Respect are rare and valuable, it meets the criteria for money.

Scarcity April 22, 2011 at 5:38 pm

But the issuers of the copper certificates devalued the certificates from 21 certificates per oz of copper to 35 certificates per oz of copper and then to 1500 certificates per oz of copper, even though the certificate says 1/21 oz of copper payable to the bearer on demand. And they won’t even let you redeem your certificates for copper. You have to get it from fractional reserve commodity exchanges that are rigged by the government and devalue the certificates even more just in the process of exchanging them.

Freedom Fighter April 22, 2011 at 8:58 pm

Buy nickels, 5 cent coins hold 25% nickel and 75% copper.
At 5g, they are worth about 3.33 cents in metal. 3 nickels cost 15 cent and are worth 10 cents of metal.
With inflation, you are guaranteed that the metal will become worth more than the face value.

Anthony April 22, 2011 at 11:58 pm

Which will be great until “nickel hoarding” becomes a criminal offence…

oh, wait, defacing money already is a criminal offence. Oh well, we can always invest in government bonds for security.

Mike Sproul April 23, 2011 at 2:47 pm

I was talking about the practice of denominating money in one good, while backing it with another good. As long as customers are informed, there’s no fraud. The explicit devaluation you spoke of counts as fraud in my book, unless of course people had a centuries-long experience of devaluation being the norm, and adjusted their cash holdings accordingly.

Jimmy S April 23, 2011 at 9:48 am

Interesting article, though the author makes an artistic jump from the rich (capitalist) being rebuffed to the king. James appears to be speaking to individuals who would add impurities less than the King, thereby chastising counterfeiters. It’s not that I think James would approve of the King doing as much,it’s just I found it amusing that the author either missed,or floated over this point.

Gene Berman April 23, 2011 at 3:53 pm

Mr. Mueller:

Though you may have some valid points, I’m of the opinion that your entire piece is based on an essential misinterpretation of James V with respect to the term “corroded.”

In my view, this term has nothing whatever to do with any existing debasement of the coins or bullion which they happened to hold, any more than he was referring to their fine clothing as, literally, moth-eaten. My interpretation is that he was merely referring to the “vanity” or spiritual emptiness connected with accumulating or paying attention to the getting of either of these (in light of the coming disaster to be visited on them, whether a foretelling of the destruction wrought by the Roman or a “second coming” of Christ). And it’s specifically tied into a practice of mistreating of the laborers via cheating them on their payments.

I have a suggestion for you that might resolve this matter. Gary North has a multi-volume economic commentary on the Bible; it’s highly likely that this passage is covered in that work. Why not go there and see what’s said?

I don’t know what the specific words were which the King James scholarly group translated as “corrode” but I believe it to be a fact that they were perfectly familiar with the term “debased”
(and “debasement”) and would have used that most specific term if that were the meaning in the original language.

What he’s telling them is nothing more than that all of what they’ve got (and for which they’ve ostensibly behaved in other than moral fashion in order to increase, ain’t gonna be of any help or solace–when the shit hits the fan.

F. Beard April 24, 2011 at 4:16 pm

I agree that the “corrosion” does not refer to debasement of the money; it refers to the fact that the money was unused, in other words “hoarded”, as were the moth-eaten garments. The Lord has some harsh things to say about money hoarding in The Parable of the Talents – Matthew 25:14-30. Even usury (presumably from foreigners only) was preferable.

Anon April 23, 2011 at 6:42 pm

The stuff about god and the bible is great. It’s just the thing to make libertarianism (and this site) even more fringe than it already is.

cavalier973 April 24, 2011 at 4:33 pm

http://en.wikipedia.org/wiki/Religion_in_the_United_States

Belief in God is not a fringe position. Articles like this are useful even to the skeptic, because it adds to one’s arguing points when one is discussing matters with a believer.

vergilius April 24, 2011 at 2:02 am

I’m in the middle of Hulsmann’s book right now and while I am enjoying it I keep finding myself wishing someone had written a similar book based on libertarian, rather than Biblical, ethics. That’s not to say they are incompatible, it’s just that on my view, and in the view of the people who will be grading my paper on the topic, “P is asserted in a centuries-old collection of myths and morality plays” doesn’t quite meet the standards of rational academic discourse.

F. Beard April 24, 2011 at 3:16 pm

So increasing the money supply is evil thus all gold and silver mining should be abolished under a gold standard?

But assuming one wishes to get really serious about ethical money creation, the Lord told us how in Matthew 22:16-22 – separate government and private money supplies.

Austrians assume that gold and silver are ethical money forms. In fact, they are ONLY ethical as purely private money forms. The moment they are recognized by government, they become UNETHICAL money forms. Why? Because government, to be completely fair to the private sector, must either recognize ALL private money forms equally or NONE at all. Since ALL would be impractical then government money MUST ONLY be pure fiat.

As for the stealth inflation tax, that is abolished by repealing the capital gains tax and legal tender laws for private debts. No artificial limit on government money creation is required. To do so by tying it to the mining rate of PMs is not only silly but environmentally destructive and fascist too.

Edgaras April 26, 2011 at 7:09 am

“So increasing the money supply is evil thus all gold and silver mining should be abolished under a gold standard”

You forgot the major point – gold and silver alone HAS value (even though it may subjectively differ from person to person), while paper alone is almost useless (I can wash my ass with it, but that’s beside the point)… Don’t confuse the matters with poor analogies. Gold and silver are scarce, its resources are limited. But you can print almost infinite amount of paper and write as many zeros on them as you wish. Governments dictate that.

“Austrians assume that gold and silver are ethical money forms. ”

Austrian make no such assumption (maybe in your fantasy land). Anything can be money, if it is generally accepted as such. Bread can be money. Soap, can of coke, practically anything, though, not everything is practical. That’s why gold and silver is so widespread.

F. Beard April 26, 2011 at 7:58 am

You forgot the major point – gold and silver alone HAS value (even though it may subjectively differ from person to person), while paper alone is almost useless (I can wash my ass with it, but that’s beside the point)… Edgaras

Wrong. A movie ticket has value though it is just paper. Government fiat has value since one can pay taxes with it. Common stock has value since it is part ownership of a corporation.

Don’t confuse the matters with poor analogies. Gold and silver are scarce, its resources are limited. Edgaras

So now a limitation is a virtue?

But you can print almost infinite amount of paper and write as many zeros on them as you wish. Governments dictate that. Edgaras

And an amusement park could issue an almost infinite amount of tickets. Then why doesn’t it? Because the market can only bear so much is why. Now suppose amusement park tickets had to be made of silver. How would that pointless expense help?

“Austrians assume that gold and silver are ethical money forms. ” FB

Austrian make no such assumption (maybe in your fantasy land). Anything can be money, if it is generally accepted as such. Bread can be money. Soap, can of coke, practically anything, though, not everything is practical. That’s why gold and silver is so widespread. Edgaras

Fine. Then let’s just have a true free market in private money creation and then anything can be used as private money. That means in practice that the government must only recognize its own fiat as money to avoid showing favoritism.

Gene Berman April 26, 2011 at 7:56 am

C. Beard:

I am not a theist of any sort. But I am of the opinion that a careful discussion of such matters (as this matter of the interpretation of a passage in the Bible) is merited simply on the basis that, if there is to be discussion between “sides,” it is at least somewhat helpful if the sides have a clear understanding of what it is that their own side is saying.

And, further (in the interest of promoting discussion as little confused by theocratic mumbo-jumbo as possible), it’s instructive (especially to the believing side) that they be made aware of each and every way in which a particular interpretation of “Holy Scripture” cannot withstand the light of their own common sense (or their common sense augmented by up-to-date secular knowledge, whether of geography, astronomy, or economics). It is not my intention to convert the believers or to heap ridicule on some groups of words to which I happen to think they ascribe inordinate moral content–merely to gain their reflection on the obvious (at least, when pointed out) contradictions.

What must become perfectly obvious–at least eventually–to even the most religious is that the idea that some batch of literature cobbled together either by a group of scholars, even motivated by the highest ethical standards or a single charismatic leader, CANNOT be the “infallible Word of God” (nor of Allah). Simple reality must intrude at some point; and, if reality, indeed, cannot intrude–cannot even be admitted to intrude–the entire rationale for “discussion” evaporates.

That said, I will go further and say that I find very little in the arguments of most of the more religious here evincing an intention to make some particular economic (or other secular) point prevail simply because it’s “holy writ.” And, though I’m of the opinion that the economic discussion is aided not a bit by the inclusion of such passages, yet I can understand and sympathize with a general enthusiasm for showing that such ancients had given definite thought to many of the same matters as do we, often reaching conclusions influential today, whether or not accepted in science or codified in one or another law.

In your last entry, you ‘ve come close to conclusions I’d reached as part of any comprehensive overhaul of monetary systems. All of these are, unfortunately, some way “down the road,” as the
U.S. Constitution clearly gives government the authority to declare what shall be money and to regulate the value thereof; just as clearly (given the later, mid-19th century discovery of the subjectivity of value), no real progress in monetary matters can possibly take place without wide recognition of that “sticking point” and, most desirably, a Constitutional Convention to address this (and other) desirable changes in the law. (For one: I’d simply reverse the “legal tender” law and permit the government to use whatever money it saw fit–including their own “fiat”–but make it incumbent upon them to make all payment due the government–taxes, tariffs, fees, fines, etc–fully accepting of the same and, further, the only medium in which payment might be made for all government officials, employees, suppliers, and contractors.

The most important recognition about money is not whether a specific piece of something is government money or private money but, rather, lies in rendering authority legally powerless to interfere in the market (to any extent greater than that normal to a participant of large size) except as authorized directly by ordinary criminal law. (This seems very clear–glaringly obvious– when subjectivity of value is understood but that understanding hardly seems absolutely necessary–is, rather, almost “deduce-able” from ordinary principles of human freedom–see Bastiat’s THE LAW, for instance.

F. Beard April 26, 2011 at 8:22 am

(For one: I’d simply reverse the “legal tender” law and permit the government to use whatever money it saw fit–including their own “fiat”–but make it incumbent upon them to make all payment due the government–taxes, tariffs, fees, fines, etc–fully accepting of the same and, further, the only medium in which payment might be made for all government officials, employees, suppliers, and contractors. Gene Berman

Government money MUST only be the government’s own fiat. Government is force and needs no other backing for its money. To allow any additional backing is to grant special privilege (backed by the force of government) to private interests such as gold owners and miners. But that is fascism and is wicked.

The most important recognition about money is not whether a specific piece of something is government money or private money . Gene Berman

Wrong. This is a critical distinction. Government is force and the private sector is voluntary exchange. How then can they ethically use only a single money supply? They can’t.

but, rather, lies in rendering authority legally powerless to interfere in the market (to any extent greater than that normal to a participant of large size) except as authorized directly by ordinary criminal law. Gene Berman

That is readily accomplished by repealing the capital gains tax, legal tender laws for private debts and any other legal encumbrances to genuine private money supplies.

Gene Berman April 26, 2011 at 8:10 am

Hey–I know a lot of you “money” guys are on here.

Just thought I’d remind that it’s at least 5 years since I expressed my thought that gold would–almost certainly–hit $5000 an ounce. Well, of course, it hasn’t gotten anywhere close to that yet–but now there are at least a few respectable market gurus saying the same thing.

But even more significant is, that at the same time, I expressed that it would not surprise me if
gold actually got to $45,000 an ounce, or purty near, though I really didn’t expect that. Well ,of course, if it hasn’t yet gone to $5K, it sure hasn’t gone to $45K. But I feel somewhat encouraged in my seer-iness by an LRC article the other day in which Doug Casey expressed somewhat the same thing, though with an upper bound of $30K. Looks like I’m in good company (or is the rest of ‘em that’re in good company?)

F. Beard April 26, 2011 at 8:30 am

LOL!

You guys are expecting to hit the jackpot with your favorite shiny metals. But how can that happen UNLESS the Federal Government recognizes gold and silver as money? Yes, the States may make gold and silver legal tender but the Federal Government need not and MUST NOT.

The money problem is not fiat; it is lack of true liberty in private money creation. “Golden fiat” is thus not the solution and is a fascist attempt besides.

BioTube April 26, 2011 at 9:35 am

Way to completely miss the point.

F. Beard April 26, 2011 at 11:05 am

No, I think I’m on target. If the rise in the price of gold was purely due to a decline in the US dollar than all commodities would be up roughly the same but they are not.

I would bet that much of gold’s current price is the expectation that it will be remonetized by government fiat (intentional irony.)

Gene Berman April 26, 2011 at 4:22 pm

F. Beard:

You’ve got me all wrong! I don’t own any “shiny metals”–at least not on purpose. Don’t invest in anything at all. Got better uses for whatever money I’ve get ahold of: cigarets, whiskey, an’ wimmin!

But it’s a mistake to think that the market price of anything bears the necessarily close relationshipwith that of another, even a “monetary metal,” especially when that metal no longer serves an official monetary purpose. Everything on the market’s related, of course,–just not in any simple way, even “roughly.” Of course, you’re right that a certain amount of speculation on gold (and even silver) is fueled by the expectation you’ve identified–it’s certainly a potential in any future-oriented thought.

But nothing I’ve said here (or anywhere) should lead one to believe I favor a return to the “gold standard.” As a matter of fact, I’ve pointed out–some dozens of times over the years in this forum–that the gold standard was an element (I used the term “way-station”) on the path to the present and the very best it could accomplish now would be to provide temporary semi-stability.
That being said, however, I’m of the very definite opinion that gold is the substance most fit to serve as money and that, sooner or later it will be. Sooner would be better.

F. Beard April 26, 2011 at 4:35 pm

That being said, however, I’m of the very definite opinion that gold is the substance most fit to serve as money and that, sooner or later it will be. Gene Berman

Well the ONLY ethical place for PMs as money is the private sector.

However, I have doubts PMs could survive there for long. But let the free market decide that and continue to decide that forever.

Rick Weinle April 27, 2011 at 9:51 am

Say’s law states that production is the means for the demand of goods and services.

Gold coins (money) is the medium of exchange that consumers use to trade their production for the production of others.

When the State melts 1000 gold coins adds tin and mints 2000 debased gold coins the illusion
of additional demand exists as the State uses these coins to trade for production. There is no added production. Those who accept the debased gold coins soon find insufficient production to trade for their gold coins.

Since more coins exist without additional production one will exchange (trade) more coin for production.

The illusion of additional demand (more coins) is the cause of the rising exchange value of production for coin (inflation).

Some of the value of one’s production (wealth) is stolen by the State as it trades coin for production before the exchange value has as adjusted.

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