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| Rebalancing the economy? Yeah right! | |
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| Topic Started: Feb 7 2015, 06:42 PM (512 Views) | |
| Tigger | Feb 7 2015, 06:42 PM Post #1 |
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Senior Member
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This is why the Tories must go, sure the alternative is Labour but in fairness what have we got to lose? Given the fact that the balance of payments is the worst in several years, the march of the manufacturers has been struck down with arthritis and the nation is splashing the plastic once again and all this with stagnant wages and dire productivity. I'm wearily coming to the conclusion that the Tories are even more economically illiterate that Labour. |
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| Lewis | Feb 7 2015, 07:09 PM Post #2 |
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Totally agree, the Tories have been totally incompetent with the economy. It is not a rebalancing exercise by them but complete unbalancing. Totally bereft of any vestige of common sense and they have wasted billions of pounds of our money by wrecking the NHS on useless reforms. |
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| The Buccaneer | Feb 7 2015, 09:15 PM Post #3 |
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Ah, all is well then, given that 2 of the usual deluded doomsayers say that we're in trouble. Sinks back, reaches for the popcorn and furry slippers................ |
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| Lewis | Feb 7 2015, 11:03 PM Post #4 |
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Well Tory voting right wing cretins are ignored too. |
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| Tigger | Feb 7 2015, 11:32 PM Post #5 |
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You'll probably be long gone by the time the folly of yet another round of Tory boom and bust reaches it's inevitable conclusion, I suspect though you'd be singing a very different tune if the other lot were doing this and producing the horrendous stats that have come out in the last few days. |
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| RJD | Feb 8 2015, 04:42 PM Post #6 |
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Prudence and Thrift
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There is much in what you say, however, even you must have noted the amount of private de-leveraging in the UK since the heady days of 2007/08. Just take a look at private debt. Considering the furore from the left at any and all cuts in public expenditure I wonder how it will be possible for a Gov. of the centre ground to be ever able to work on rebalancing the economy. It as absolutely clear that the left have zero interest or understanding of how wealth is created and why it is the basis of our State. I certainly would like to see significant growth in private sector manufacturing in the UK, but do not see how that is likely to be possible without a significant reduction in taxation on jobs. Will Labour rebalance the economy away from debt fuelled consumption towards greater production, I think not as all their pronouncements are in the opposite direction. Remember it was under their watch that £44b of manufacturing AV was lost and they did not notice. Truth is Labour do not have an industrial strategy they are only interested in the Public Sector. So whilst Osborne has done little, he has achieved significantly more than Balls would attempt and he is inching in the right direction. Yes Labour would make a parlous state even worse, particularly for future generations. |
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| Steve K | Feb 8 2015, 07:11 PM Post #7 |
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Once and future cynic
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Yes the balance of payments figures are awful. Unfortunately what that tells us is British wage rates are too high in international terms High enough to buy loads of stuff and too high to make our exports competitive |
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| Affa | Feb 8 2015, 07:51 PM Post #8 |
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But not high enough to keep millions off benefits, top-up, the cost of living being too high. |
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| Steve K | Feb 8 2015, 08:44 PM Post #9 |
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Once and future cynic
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welcome to the reality of economics. There are no easy solutions if you want every Brit to have a decent standard of living in a world where most people work for far less |
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| Tigger | Feb 8 2015, 09:13 PM Post #10 |
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I don't have any answers to most of this as we currently have a government hell bent on repeating the mistakes of the previous lot by essentially bribing the public with it's own money and keeping it's fingers crossed that the eventual shitstorm falls on someone else's watch. I'd have almost certainly have voted Tory at the next GE despite my social morals and severe reservations with modern conservatism, but they just could not resist yet another debt fuelled housing boom and consumer binge, they have to go because of this and just pray that whatever we get afterwards has the bottle to tell us this is not a viable strategy for the long term economic and indeed social health of our nation. |
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| Tigger | Feb 8 2015, 09:20 PM Post #11 |
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There is a very easy way, you shift the tax burden away from productive work and onto assets because overvalued assets impose a tariff on genuine wealth creation, and we have done this before and it worked, the post war Attlee government did just this and our exports boomed, living standards started to climb and lazy rent seeking and profiteering from simply holding assets was severely curtailed. I'm afraid we need radical solutions instead of just continually pretending the problems are elsewhere. |
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| Rich | Feb 8 2015, 09:20 PM Post #12 |
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The only way that that will happen is for anyone of the main contenders to lie through their teeth regarding a manifesto and do a u turn once in office, but will they have the gujons to do that as it would seem that the majority of the electorate do not want to hear palateable truths but prefer to be told that every thing is and will be hunky dory and all without any pain to peoples pockets. Blimey, was that a pig with wings that just flew past my front window?
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| Tigger | Feb 8 2015, 09:27 PM Post #13 |
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I suspect that most people already know the truth, but being a nation of moaners and not do'ers and expecting bread and circuses from whoever in in power on pain of de selection, I think the majority get exactly what they fully deserve, will they eventually learn though? Tough one that. |
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| Steve K | Feb 8 2015, 09:28 PM Post #14 |
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Once and future cynic
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Bloody hell I'm starting to convert a few You'll have to tax more than wealth though to make it affordable |
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| Tigger | Feb 8 2015, 09:47 PM Post #15 |
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I've been preaching this for years and there is an element of self interest here. No need to tax wealth if it is earned, you need to stop subsidizing those with land, property or those who live by rent seeking in it's various forms, because those doing productive work are rapidly approaching a point where they cannot afford the latter, and that means more than just financial trouble ahead. |
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| Affa | Feb 8 2015, 11:03 PM Post #16 |
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It doesn't sink in that the UK is one of the wealthiest nations in the planet, that there is no deficit of money ........ there is money to burn being made. It just happens to be monopolised by the very few, and they ensure it stays that way. Of course I'd agree with you, 100% if it were not as I tell. Wealth is not widely distributed, and getting the wealthiest to start distributing here where it does EVERYONE most good is nigh impossible whilst they also influence government to maintain tha status quo. Edited by Affa, Feb 8 2015, 11:08 PM.
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| Rich | Feb 8 2015, 11:04 PM Post #17 |
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What is your solution to remedy that apparent problem? |
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| Affa | Feb 8 2015, 11:07 PM Post #18 |
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Read the edited version ... above. |
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| Steve K | Feb 8 2015, 11:24 PM Post #19 |
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Once and future cynic
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But when you look at who owns that wealth you find it has a lot people who brought that wealth to the UK and people who have brought wealth earned outside the country. Hit them and they will just bugger off http://www.mirror.co.uk/news/uk-news/times-rich-list-number-billionaires-3561098 You also have the issue that you have something like £500B owned by that top 1000. Sounds a lot but take the lot and spread it evenly and that comes out at £16k for every working person. And that'd be a one off so what are you going to do the next year and the year after and . . . .? We should tax the wealthy more but the only thing that would change is the unfairness that they get away with low rates of tax Bottom line is we have to earn more as a country and with our wage rates and political dogmas that is going to be hard. |
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| Lewis | Feb 8 2015, 11:27 PM Post #20 |
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High time wealth was distributed fairly in the UK. Wages are way too low. |
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| Tigger | Feb 8 2015, 11:40 PM Post #21 |
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Well every billionaire is potentially a thousand millionaires. ![]() And it's not just me that thinks that, investor Nick Hanauer who is a billionaire has claimed that having wealth concentrated in too few hands is very bad news, he also claims that the middle classes create wealth and that people like him just use that wealth, he did have a video over on the TED website that went into some detail, entitled the pitchforks are coming, but TED appear to have removed it! Hopefully it will pop up somewhere else. Edited by Tigger, Feb 8 2015, 11:44 PM.
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| Steve K | Feb 8 2015, 11:45 PM Post #22 |
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Once and future cynic
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Now try spreading that £500B across over 30 million+ working people The UK is worth about £7T, a massive amount of that wealth is not in private hands of the idle rich, it is in our pension funds needed to keep those 30 million people in some sort of adequate living in retirement. Anyone want to advocate another raid on those? |
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| C-too | Feb 8 2015, 11:48 PM Post #23 |
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With most economies struggling, I don't know but I would assume, that most countries are feeling the pinch when it comes to exporting goods. Then we have the added problem of sucking in imports because we have killed off so much of our own manufacturing, and that is down to indulging in our Financial Services economy. |
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| Tigger | Feb 8 2015, 11:53 PM Post #24 |
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Wealth distribution as it is today in Britain is concentrated in the hands of fixed asset and property holders, land and houses by themselves create no wealth they just sit there looking nice. Remove all subsidies from these asset classes and watch a proper capitalist rebalancing of the economy take place, and yes it will be painful for the few, we cannot carry on with millions locked out of the economy and used simply as debt serfs to keep a small percentage of the population in idle comfort. |
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| Steve K | Feb 8 2015, 11:58 PM Post #25 |
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Once and future cynic
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Financial Services is what has been keeping the trade balance tolerable for the last 50 years It is just harder and harder each year to mass manufacture goods in the UK at decent wages and employers NI levies that could then compete in the international market. Hi mix Low Volume manufacture maybe. The man in the street wants his £20 kettle, his £200 smart phone. Now do the maths when the Labour rates in the Far East and Third World are a fraction of ours. |
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| C-too | Feb 9 2015, 12:41 AM Post #26 |
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50 years ago financial services, then known as 'hidden earnings' or some such name, used to make up the shortfall from trading exports. The point is if we made more of our own requirements we would import less. It seems that other advanced countries can do it. The UK purposely turned its back on much of manufacturing, now we are desperately trying to reverse that trend. How do other advanced countries that didn't put most of their eggs in the financial services basket manage economically ? |
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| johnofgwent | Feb 9 2015, 08:06 AM Post #27 |
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It .. It is GREEN !!
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The post war atlee government "achieved" this by nationalising everything in sight, dumping our empire and rationing bread. Good luck with reworking that today ... |
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| johnofgwent | Feb 9 2015, 08:14 AM Post #28 |
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It .. It is GREEN !!
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Ctoo the word you were seeking was "invisible exports" and the british economy has, for as long as i can remember, been propped up by these "invisible" exports which take the form of fees charged for banking, insurance and other services of a like kind. What people overlook is the degree to which clamour for housing has driven up the cost of living, as I have repeatedly pointed out, the real problem we have with our "benefits" culture is the fact that all manner of people who do not own a home of their own or a mortgage to go with it are being handed wads of money which can be in excess of their weekly wage bill to pay their rent, which goes straight to the landlord ... and as I have said several times, rents - and property prices - have been allowed to explode to the point where everyone else is being bled dry to pay those subsidies. Edited by johnofgwent, Feb 9 2015, 08:20 AM.
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| C-too | Feb 9 2015, 08:50 AM Post #29 |
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Honourable Member
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The Attlee government followed an export led recovery policy. The Japanese, who apparently had been advised to produce tin toys, adopted the Labour government approach including nationalising some of their industry. The Tories kicked the export led approach into touch visiting the IMF on a number of occasions and leaving the second largest trading deficit ever recorded at that time. I suspect that with a less easily led electorate we could have been looking at a far stronger post war economy. |
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| Steve K | Feb 9 2015, 10:48 AM Post #30 |
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Once and future cynic
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When were those IMF loans C-Too? I remember us going in 1976 under Callaghan but you're saying the Conservatives went several times and one thing we could all agree on is Callaghan was't a Tory. |
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| C-too | Feb 9 2015, 01:10 PM Post #31 |
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Honourable Member
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Visits to the IMF took place in the 1950s and 60s. IIRC there were three visits from the Tories and two by Labour. With another by Labour in 1976 after the crap hit the fan under Heath. In fairness Heath just happened to be in office when a recession was exacerbated by the oil crisis in 1973. |
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| Affa | Feb 9 2015, 02:20 PM Post #32 |
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Average incidence of low pay in the OECD (%) - 2011-12 The UK's position in terms of low pay is one of the worst in the OECD. http://www.theworkfoundation.com/Datalab/Average-incidence-of-low-pay-in-the-OECD---2011-12
http://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publication/wcms_194843.pdf The first link contains a chart that reveals that the incidence of low wages in the UK is the worst in Europe - and that does include the formally Eastern bloc. I can explain this chart, and its damning conclusion in a simple statement. Those countries with the highest incidence of low wages are also where the wealth gap is widest ......... rich countries with most of the created wealth in the fewest hands. |
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| C-too | Feb 9 2015, 04:34 PM Post #33 |
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Very good, Thanks. I'm not sure I will get through it all. |
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| Steve K | Feb 9 2015, 04:46 PM Post #34 |
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Once and future cynic
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I just can't find any reference to an IMF loan other than 1976. Here's an example history or three http://www.bbc.co.uk/history/british/timeline/present_timeline_noflash.shtml http://www.bbc.co.uk/history/british/modern/thatcherism_01.shtml http://www.londoninternational.ac.uk/sites/default/files/documents/sample_materials/introduction_history_sample.pdf Can you recheck please particularly as the last one says "In 1976 – the year of the IMF loan" |
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| Affa | Feb 9 2015, 05:17 PM Post #35 |
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I'm going out on a limb here, but in the interest of honest debate, then so be it. Those figures for a huge rise in wages over the last decade or so are not as defining as they first appear. Most, like China, started from a very low base, and even a tripling of average wages still leaves most far behind the developed nations of which we are one. Average earnings China 2014 = 52388 CNY pa Equates to £5,511 but even that isn't the whole picture - the cost of living is far lower in China. .
Edited by Affa, Feb 9 2015, 05:22 PM.
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| Lewis | Feb 9 2015, 06:48 PM Post #36 |
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Interesting, China's wage bill seems to go ever upward whilst ours has stagnated. Another thing I've read that whilst making goods is still cheaper in China however the shipping costs are significant and there are issues over quality.
http://www.bbc.co.uk/news/business-17952023
http://helptobuyfromchina.com/quality-checks-china/ Some importers are thinking of even having their goods made again in good old Blighty! |
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| C-too | Feb 9 2015, 07:24 PM Post #37 |
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I had this information on my old now defunct computer. And I'm having a little difficulty with new one. You might get confirmation of the copy/past below if you google --- researchgate imf Britain. If successful go to page 17. "The background to the 1965 approach to the Fund was an enduring weak British payments position after the 1961 loan. As in 1961 (but unlike 1956), borrowings in 1963 and 1964 were accompanied by Letters of Intent, the formal statement of the ‘understanding’ reached with the IMF. These two Letters of Intent occasioned little debate in government circles (they were not made public) and included no mention of DCE, though in the drafting of the 1964 letter the IMF raised concerns about inflation and the appropriate monetary policy to combat it. Labour’s 1964 election victory was swiftly followed by a payments crisis, and the imposition (after IMF consultation) of a controversial import surcharge. The IMF extended further credit in November 1964, when its concerns focused primarily on the UK balance of payments |
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| Steve K | Feb 9 2015, 08:12 PM Post #38 |
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Once and future cynic
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Amazing. I didn't use that source as you have to register as a bona fide researcher but i believe this is the article you mention http://wrap.warwick.ac.uk/865/1/WRAP_Clift_negotiating_credibility.pdf And there is definite content there about IMF loans to the UK well before the massive one in 1976. It's also an interesting read of how the UK turned from world leader to basket case Anyway to be clear, C-too you were right. |
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| Oddball 2014 | Feb 9 2015, 08:57 PM Post #39 |
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Lewis - China's average wage will peak out, much as Japan's did, then it will be the turn of another cheap waged and uncluttered with rules and regulations and health and safety country/countries to emerge as a/the dominant production based economy.
Edited by Oddball 2014, Feb 9 2015, 08:58 PM.
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| C-too | Feb 9 2015, 09:45 PM Post #40 |
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Honourable Member
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Cheers. |
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