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Canada Inflation Surges: Core Comes At 0.7% On 0.2% Consensus

Tyler Durden's picture


A surprise out of the Bank Of Canada, which just announced that despite expectations for CPI coming at a modest 0.6% and 0.2% for the core, inflation was a blistering 1.1%, and 0.7% ex-non core items. Has the inflation genie finally come out of the bottle in the northern neighbor? While Goldman attempts to talk down this "ugly report", attributing the spike to a short-lived commodity spike (that's that temporary word again), the currency market was not as easily fooled: USDCAD moved a good 50 pips from 0.963 to 0.958 in seconds, giving the dollar another push in the race to the global currency bottom.

From Goldman

Sharp Increase in Core, Likely on Commodity Price Pass-Through
Large upside surprise in core inflation, pushing year-over-year figure much closer to Bank of Canada's target.

1. Canada's core CPI surprised sharply to the upside in March, rising 0.5% on a seasonally adjusted basis on the month and more than reversing the downside surprises of prior months. Two key factors explaining the sharp rise in the core index were clothing/shoes (+2.1% mom SA, the largest monthly increase on record, worth about 14 basis points on the SA core), and food (+1.6% mom SA, also the largest monthly increase on record; unlike the US core index, a large part of food is included in the Canadian core index--with a simple assumption that food prices rose equally across all categories, this would be worth about 30 basis points on the SA core). Given increases in cotton prices in recent months, commodity prices look to be a factor in both of these increases.

2. Headline inflation rose 0.8% on a seasonally adjusted basis, 3.3% year-over-year; while this was also an upside surprise relative to the consensus forecast, essentially all of this surprise is explained by the higher core. Gasoline prices rose sharply, as expected.

3. If there is any silver lining to this generally ugly report, it is that inflation due to commodity-price pass through is likely to be temporary. Without further increases in commodity prices, the peak impact on the CPI should be reached within the next few months.


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Tue, 04/19/2011 - 07:41 | 1183266 Sudden Debt
Sudden Debt's picture

inflation is likely to be temporary...

Yes... it will all be over in 2090. But what happens between now and then might be a bit confusing for them...



Tue, 04/19/2011 - 08:55 | 1183427 EscapeKey
EscapeKey's picture

It's Mervyn King's favourite excuse as well.


Tue, 04/19/2011 - 09:21 | 1183476 bankrupt JPM bu...
bankrupt JPM buy silver's picture

$5.35/gallon at the pump baby! YEH!!!

Tue, 04/19/2011 - 07:50 | 1183275 Pseudo Anonym
Pseudo Anonym's picture

Has the inflation genies finally come out of the bottle in the northern neighbor

no, not finally.  It's been around for the last 2 years for those that eat, drive, heat their house, need warm clothes and use electricity.  But not to worry; public serpents and unionized leaches and parasites would not know since their wages are going up in a nice clip.  And they're still bitching that they want more and need more.

Tue, 04/19/2011 - 11:39 | 1184142 Ahmeexnal
Ahmeexnal's picture


"From Each According to His Ability, To Each According to His Need"


Tue, 04/19/2011 - 07:51 | 1183279 lolmao500
lolmao500's picture

Gee no kidding inflation is higher than they expected. Gas prices are 5$+ a gallon here. Food has been increasing quite a lot too.


And it'll only get worse when the US collapses and our GDP crashes by 50%.

Tue, 04/19/2011 - 08:10 | 1183313 Jack Mayoffer
Jack Mayoffer's picture

50% ehh?  

We go.

Tue, 04/19/2011 - 08:17 | 1183328 Terminus C
Terminus C's picture

75%-80% of Canada's exports go to the U.S.

So yea... U.S. goes, Canada goes

Tue, 04/19/2011 - 08:22 | 1183350 Cash_is_Trash
Cash_is_Trash's picture

This article is bogus, I don't see any inflation, none!

Then again, I work at the Federal Reserve.

; )

Tue, 04/19/2011 - 08:26 | 1183361 EscapeKey
EscapeKey's picture

Neither do I.

In fact, Penthouse flats in Mayfair, 110 inch Plasma TVs, and high end Mercedes Benz automobiles are down, which more than compensates for food prices doubling.

Deflation, bitchez.

Tue, 04/19/2011 - 09:11 | 1183462 Thomas
Thomas's picture

My investment-grade beanie babies have been in a secular downtrend as well.

Tue, 04/19/2011 - 09:22 | 1183479 Terminus C
Terminus C's picture


Tue, 04/19/2011 - 08:18 | 1183335 Big Corked Boots
Big Corked Boots's picture

Don't worry. If things get really bad then the US government will notice, take pity on your "humanitarian" situation and send troops north.

The future of the world: George Orwell meets Philip K. Dick.

Tue, 04/19/2011 - 09:51 | 1183563 tarsubil
tarsubil's picture

Philip K. Dick's reality questioning madness stories helped prepare me for today's news cycle.

Tue, 04/19/2011 - 07:53 | 1183281 The Gold Theory
The Gold Theory's picture

Gas was around $1/L here (near Toronto) around Xmas, now it is $1.40...  I'd say thats 80% per annum inflation but then again I don't get paid to do the calculation so I am unbiased and therefore incorrect. 


Tue, 04/19/2011 - 07:59 | 1183289 Sudden Debt
Sudden Debt's picture

Gas was around $1/L here (near Toronto) around Xmas, now it is $1.40...  I'd say thats 80% per annum inflation


1$ > 1.4$ = 80%... wanna try it again?  


Tue, 04/19/2011 - 08:05 | 1183299 The Gold Theory
The Gold Theory's picture

Xmas was 6 months ago, I was extrapolating for a full year (multiply by 2)

Tue, 04/19/2011 - 08:24 | 1183347 Sudden Debt
Sudden Debt's picture

6 months ago?

You're from China right? :)

Tue, 04/19/2011 - 08:08 | 1183305 sharkbait
sharkbait's picture

he said per annum.  wanna try again?

Tue, 04/19/2011 - 08:22 | 1183343 Sudden Debt
Sudden Debt's picture

I don't do Enron math.


Tue, 04/19/2011 - 09:52 | 1183574 tarsubil
tarsubil's picture

Okay, a liter cost $1 in mid Dec and now costs $1.40. Can you calculate what the annual inflation would be if the trend continues?

Tue, 04/19/2011 - 10:12 | 1183665 Sudden Debt
Sudden Debt's picture

Somewhere between 1$ and 2$.

Oil is a consumer good. The higher the price, the lower demand and equilibrium comes to bite you in the ass :)


Tue, 04/19/2011 - 11:54 | 1184207 Spitzer
Spitzer's picture

yes fool, but this is happening while inventories are rising.

Tue, 04/19/2011 - 08:05 | 1183304 Übermensch
Übermensch's picture

This is what you get for privatizing the nations oil wealth... Nationalize health care but let private corporations plunder its resources. Politicians are true scum of the Earth.

Tue, 04/19/2011 - 08:21 | 1183339 Jessica6
Jessica6's picture

I don't know why the NDP aren't campaigning on that - nationalizing oil. Not saying I neccessarily agree with it, but they're supposed to be Socialist, aren't they? They'd probably win if they did. The only province that would get upset about it is Alberta and they've always been solidly conservative.

Guess they have been fully hijacked by the greenies.

Tue, 04/19/2011 - 08:41 | 1183396 Dr. Porkchop
Dr. Porkchop's picture

Oil nationalization is scary talk.

That was actually Trudeau's greatest gift to conservatives.. The NEP. Gave them the ability to get westerners agitated at the drop of a hat!

Tue, 04/19/2011 - 09:16 | 1183474 Canucklehead
Canucklehead's picture

With the passage of the Clarity Act to deal with future Quebec separation votes, any nationalization of Oil talk will result in a separation referendum for most of Western Canada.  Present speculation is that the Tar Sands generates $50 Billion in Federal royalties.  Separated Alberta and Saskatchewan would see those funds flow to their citizens (~3.5 million people).

Tue, 04/19/2011 - 08:50 | 1183416 mogul rider
mogul rider's picture

No public sector health unions are the scum of the earth. We allocate more dollars to health and htey take it all in boguc wage increases and no dollars for health


Gotcha Nice try

Tue, 04/19/2011 - 11:34 | 1184123 Sopra Tutt1
Sopra Tutt1's picture

The gas price in Toronto is now between $1.30 and $1.34 per liter. If I remember correctly, during Xmas it was $1.08 - $1.12. This time last year it was $0.93-$0.94.

Tue, 04/19/2011 - 08:00 | 1183293 breezer1
breezer1's picture

according to turners blog the re bubble is about to pop big time. worse than the states.

Tue, 04/19/2011 - 08:46 | 1183402 Dr. Porkchop
Dr. Porkchop's picture

I dont mind garth's blog, and i think he's right on about RE, but he's a bit of a pm hater.

Tue, 04/19/2011 - 08:52 | 1183422 mogul rider
mogul rider's picture

10 years ago Garth was the strongest advocate for taking 100K mortgages out on your house and buying Nortel


Check it out, yup he's a winner alright

Tue, 04/19/2011 - 08:01 | 1183296 X. Kurt OSis
X. Kurt OSis's picture

Inflation is good for sheep, eh.

BTFD, hosers.

Tue, 04/19/2011 - 08:04 | 1183297 assumptionblindness
assumptionblindness's picture

This report just verifies how fucked-up our inflation 'data' is here in the USofA.  How can it be that Canada has so much more inflation than the US?  Didn't the Canadian dollar STRENGTHEN vs. the greenback last month?   Jeezus!!!

Tue, 04/19/2011 - 08:08 | 1183312 sharkbait
sharkbait's picture

The teleprompter in chief may be forced to declare a no fly zone over Canada for humanatarian reasons if they don't stop publishing correct but troubling data.  The people may get scared and we don't want that do we.

Tue, 04/19/2011 - 08:12 | 1183318 Übermensch
Übermensch's picture

You are correct the loonie did strenghten against the USD. But NONE of that currency appreciation has been passed on to consumers. You see according to major retailers consumers would much rather pay higher more "stable" prices rather than a "volatile" decreasing price... You can't make this shit up!

Tue, 04/19/2011 - 10:05 | 1183630 Sheriff Douchen...
Sheriff Douchenik from AZ's picture

Exactly, no f/x savings being passed to the consumer...that's why cross border shopping is probably going gangbusters. Pop down to the states for the weekend and load up on 'stuff'.

Tue, 04/19/2011 - 12:52 | 1184543 Diogenes
Diogenes's picture

Go into any bookstore in Canada and all the books will be marked with 2 prices. The  US price and the Canadian price which is 20% higher. And they are sticking to this in spite of the fact that the Canadian dollar is now higher than the US dollar.

Actual example, the last book I bought,2 weeks ago  Free Lunch by David Cay Johnson, US price $24.95 Canadian price $30.00 printed and published in the US.

No wonder online book stores are so popular.

Tue, 04/19/2011 - 08:03 | 1183301 topcallingtroll
topcallingtroll's picture

Currency readjustments are ugly when every mercantilist in the world lets imbalances build up, and then reloans the money in a procyclical way rather than increase internal demand.

We will get through this.  The USA may even come out ahead again if we can get our act together and cut out all the subsidy, moral hazard, and transfer payments.

Canada is just collateral damage.


Tue, 04/19/2011 - 08:12 | 1183315 PY-129-20
PY-129-20's picture

OT: The Libyan Rebels are now officially using Hippies to win the war against Qdaffy:

Tue, 04/19/2011 - 08:23 | 1183345 augie
augie's picture

FAL is not a hippy rifle.

Tue, 04/19/2011 - 08:38 | 1183385 topcallingtroll
topcallingtroll's picture

The FAL has probably been one of the greatest and least appreciated modern  main battle rifle.

The m16 clones and variations are city guns.  They are too prissy for long term desert and forest use without great depth in your support units and inventory.

For an army that is run on a shoe string budget you can go ak47 or FAL.  For most situations I will take the FAL.

Tue, 04/19/2011 - 09:21 | 1183481 Canucklehead
Canucklehead's picture

The FAL does not hold a candle to an M1A (clone or original).  Your typical soldier cannot shoot an FAL or M14 in automatic mode.

The FAL does not have the accuracy potential of an M1A, or an AR-10.

In Canada you can get a M1A clone for $450. 

No serious army uses the FAL.  The only market for FALs competes with Chinese M1As.

Tue, 04/19/2011 - 09:58 | 1183605 tarsubil
tarsubil's picture

I can't find a M1A for less than ~$1300. Where do I find the $450 versions?

Tue, 04/19/2011 - 11:10 | 1183998 Canucklehead
Canucklehead's picture

The $450 version is the Chinese Norinco version sold in Canada.  It is the same as the Polytech version that was sold in the US up to the early 90's.

If you check out, you will find lots of information about them.  You would need to join in order to visit the forums.  If you don't want to join, check out the website advertisers.  Many of the advertisers carry the various Norinco products.

Tue, 04/19/2011 - 11:29 | 1184089 tarsubil
tarsubil's picture

Thank you.

Tue, 04/19/2011 - 08:10 | 1183317 X. Kurt OSis
X. Kurt OSis's picture

Per bbg, QE2.5 is in effect. Trade accordingly (which means short everything, the Fed is out of ammo and is just hoping that telling the world that rolling its maturities is stimulus is enough).

Tue, 04/19/2011 - 08:17 | 1183326 Marty Rothbard
Marty Rothbard's picture

   Canada's real estate bubble is now in the first stage of collapse.  The collapse will cause monetary deflation, as the price of housing, and commercial real estate plunge.  The bubbble is particularly severe in British Colombia, particularly Vancouver.  The Vancouver bubble has been driven , in particular by Chinese money.  The Chinese are now tightening credit by raising interest rates, and bankng reserve requirements.  This will bring money home to China, exacerbating the fall in prices.  This will moderate the consumer price inflation now evident, as will the strenghtening of theCanadian dollar, due to rising commodity exports.

   The Canadian dollar lacks the foreign reserve status of the US dollar, so they have not been given as much rope to hang themselves with.   In the early 1990s, Canada was able to turn around a large sovereign debt problem.  This experience has left them with the lowest reprorted debt to GDP ratio of the G-7.


Tue, 04/19/2011 - 09:05 | 1183458 cowpieflapjack
cowpieflapjack's picture

Though I don't believe anyone has ever posted factual info corroborating the Chinese angle to the boom in Vancouver.

Tue, 04/19/2011 - 11:59 | 1184222 Spitzer
Spitzer's picture

The popping bubble will NOT CAUSE DEFLATION. Did the Euro rise or fall when Greece got into trouble ?

It fell, which is not deflation.

Tue, 04/19/2011 - 13:00 | 1184593 Diogenes
Diogenes's picture

Bullshit. Vancouver and Toronto may be in bubbles of their own but that covers less than 1% of Canadian real estate. And if you bought the bubble when the US bubble blew up in 06 you would have seen an increase in value of 50% or more in those cities so far.

Whether those 2 cities will see their bubbles burst, I do not know. I do know that in small town Ontario where I live and invest, there was a short lived dip in the wake of the US bubble burst, of about 10% or less over 6 months. Since then prices have gone up, up, up but are still good value. I sold out between 2007 and 2010 and regret it. Since last fall I hva been buying and am happy. The way things are going inflation is not going to stop and anyone who locks in some mortgages at today's rates is going to look awfully smart, not to mention rich, in 5 years.

Tue, 04/19/2011 - 08:17 | 1183334 Richarda2
Richarda2's picture

I am in Canada and am paying $ 26.00 per 50 round box of American Eagle .45 Acp ammo, to feed my 1911

It was 17.00 per box 2 years ago.

Tue, 04/19/2011 - 09:15 | 1183470 Pegasus Muse
Pegasus Muse's picture

Check out Cheaper than Dirt:

They run some good specials.  Sign up to get their weekly flyer.

Tue, 04/19/2011 - 09:22 | 1183484 Canucklehead
Canucklehead's picture

Cheaper Than Dirt won't ship to Canada.

Tue, 04/19/2011 - 08:20 | 1183342 augie
augie's picture

I suck.

Tue, 04/19/2011 - 08:27 | 1183362 Cash_is_Trash
Cash_is_Trash's picture

You'll always be surpassed by Ben, Tim and Barry.

Chin up cowboy.

Tue, 04/19/2011 - 08:29 | 1183372 augie
augie's picture

Ha thanks just double posted and was trying to cover my douchery with self-deprication. Works for larry david but then again, i'm not a joo.

Tue, 04/19/2011 - 08:23 | 1183344 FranSix
Tue, 04/19/2011 - 08:27 | 1183359 Youri Carma
Youri Carma's picture

Inflation rate surges to 3.3%

Canada’s inflation rate quickened at the fastest pace in two-and-a-half years in March as costs for gasoline and food heated up, suggesting the country is not immune to soaring commodity prices that are pressuring much of the world.

The country’s consumer price index accelerated to 3.3% after a 2.2% annual increase in February, Statistics Canada said Tuesday. The reading was the highest since September, 2008, and topped economists’ expectations.

Tue, 04/19/2011 - 08:31 | 1183371 GodsofGreektown
GodsofGreektown's picture

Canada hides its corruption better than any country in the world.  Institutionalized Gulags in public and corporate sectors alike.  Rightly so, the world uses their energies to scrutinize The Fed and the US banking system but what about the so called 'pristine' banks in Canada?  Think about it, most of Canada works in the public sector or the financial sector.  That's a lot of employees who are too scared to say fuck in order to protect their jobs.  Canada is a whorehouse and outside of Toronto is where the Eyes Wide Shut freaks live.

They don't mind that the American White-Collar Gangsters get all the fame and glory.

Tue, 04/19/2011 - 09:29 | 1183501 Terminus C
Terminus C's picture

Canadian banks are no different than American banks.  They are all part of the same cartel. 

There are a few of us who have our eyes wide open, and are trying to wake up the others.  It is a long and arduous process and I am not sure we'll rouse enough people in time.

Tue, 04/19/2011 - 13:19 | 1184701 Diogenes
Diogenes's picture

Canadian banks are the smartest in the world. Better than the Swiss banks, and they can leave their US counterparts frozen against the cushion on the best day they ever saw.

If you followed the news during the late banking crisis in the US at the bottom of the reports in the Canadian financial papers would be a footnote saying the Canadian banks got in on the crazy loans when the money was good but stopped buying a year and a half to two years before the bubble blew up. Most Canadian banks made good money off the bubble but lost little or nothing when it blew. I think the biggest Canadian bank exposure was $5 billon, a drop in the bucket.

This is typical. I have seen basically the same scenario in every financial crisis all the way back to when Brazilian bonds blew up back in the 70s.

Canadian banks make more money, and take fewer losses than any banks in the world. No Canadian bank has gone broke since 1854.

Tue, 04/19/2011 - 13:36 | 1184787 Malachi Constant
Malachi Constant's picture

Canada hides its corruption better than any country in the world.

This. No other country can out-hypocrisy Canada. Look for Lord Moran's letter about Canada, especially the part about politicians. Wish I could unjunk you.

Tue, 04/19/2011 - 08:34 | 1183380 breezer1
breezer1's picture

i am on the east coast and everyone i know is up to their neck in debt. houses, vehicles and vacations. most on the back of emergency rates by the BoC. 35-40 year super low variable rates with big lines of credit. recent pullbacks by the big guys have not deterred the secondary lenders. there will be a lot of pain when we lose our biggest export partner to default.

everyone i know has family in the states and it seems we have learned nothing from their pain. no one wants to know about it. lots of folks rushing out to p/u florida and arizona real estate. i talked a couple out of buying down south and they are thankful they didn't since prices are still dropping. i fear it will be a whole lot worse than most will be able to adapt to.

Tue, 04/19/2011 - 08:51 | 1183415 cowpieflapjack
cowpieflapjack's picture

Once the Canucknuckleheads get past the stream of bullshit mantra that they are somehow superior because their banks were smarter, they'll be circling the bowl. Clockwise. The Aussies will be CCW.

Tue, 04/19/2011 - 12:05 | 1184247 Spitzer
Spitzer's picture

My bank (BMO) got a backdoor bailout from the Fed. Royal is an official primary dealer of the Fed. Scotia bank is an official fraudulent fed bullion bank and all of them are authorized participants of the GLD ETF fraud.

Tue, 04/19/2011 - 08:52 | 1183417 Dr. Porkchop
Dr. Porkchop's picture

Once Harper eliminates the census completely, we wont need to worry about such ugly numbers. Streve will just tell us how it is and stats can will make pie charts showing how right he is.

Tue, 04/19/2011 - 09:02 | 1183451 cowpieflapjack
cowpieflapjack's picture

The doctor is in.... I hope you're Canadian. That's funny shit right there.

Tue, 04/19/2011 - 09:28 | 1183493 Canucklehead
Canucklehead's picture

Vast chunks of the Canada either never filled out a census, or fudged the census as a joke.  There has been long standing concern that the census numbers are garbage because of all the mathematical corrections used to factor a final number.

Tue, 04/19/2011 - 10:11 | 1183651 Sheriff Douchen...
Sheriff Douchenik from AZ's picture

Canada is a good example for the US as in once healthcare is nationalized (as it is up here)...the next prize for Cdn socialists is to nationalize daycare (more unionized public sector jobs right?) never stops. You're all good in the liberals hands with someone elses money. Very compassionate.


Tue, 04/19/2011 - 08:56 | 1183429 TheEternalTriangle
TheEternalTriangle's picture

err, I wouldn't call 1.1% "blistering".

Tue, 04/19/2011 - 09:58 | 1183591 Terminus C
Terminus C's picture

Month over month...

That is a fairly rapid inflation rate.  Were it to maintain that rate for the rest of the year we'd be in double digit inflation over the year.

Tue, 04/19/2011 - 08:55 | 1183430 mogul rider
mogul rider's picture

Where's AKAK (alias kaka) and WEBBLOTO

I figured you'd be all over the Canada bashing.

Bring it on douchebags.


I'm itching for fight today. Where are my nancy boys - here nancy boys

Tue, 04/19/2011 - 09:06 | 1183459 monopoly
monopoly's picture

Not to worry, it is all transitory, that is what the govt. said. Until it moves to infinity and beyond.

Tue, 04/19/2011 - 09:57 | 1183595 Terminus C
Terminus C's picture

but... beyond... is transitory... so, in effect they are not lying.

Tue, 04/19/2011 - 10:15 | 1183683 Sheriff Douchen...
Sheriff Douchenik from AZ's picture

I'm not corncerned I just save my eating and driving for when it is affordable. In the meantime watching the 3 movies available on Netflix with my Ipad2 keeps me going.

Tue, 04/19/2011 - 11:52 | 1184191 malek
malek's picture

+1 Krugman, the Bernank, and the Teleprompter in Chief will look you will be awarded the Medal of Freedoom. Post mortem.

Tue, 04/19/2011 - 11:08 | 1183987 Bansters-in-my-...
Bansters-in-my- feces's picture

"A surprise out of the Bank Of Canada",

A surprise ...?????

To who...????

The fucking Canadian sheeple maybe,but anyone falling the Banksters magic ball,knew this already and have been warning thier friends and family .

Surprise.....Bull fucking shit.Bank of Canada.......!!!!!

Tue, 04/19/2011 - 11:11 | 1184017 Bansters-in-my-...
Bansters-in-my- feces's picture

"price pass through is likely to be temporary"

You fucking Sach of Goldman Sachs shit.

I hope one days you's meet your maker.

Fuckm off and Die,Goldmanites.

Your a cancerous disease....!!!!!

Tue, 04/19/2011 - 11:18 | 1184052 Bansters-in-my-...
Bansters-in-my- feces's picture


The Bank of Canada is "Goldman Sachs"

Mark Carney,an Ex Goldmanite runs the B of C .

And he was appointed a senior advisor which is also a Goldmanite.

So if you think the Bank of Canada is "CANADIAN'......Think again.

Just another branch of the Federal Reserve of the USA.

FUCK YOU...Mark Carney.

Tue, 04/19/2011 - 12:08 | 1184259 Spitzer
Spitzer's picture

Royal Bank of Canada is a Fed primary dealer.

Bank of NovaScotia is a bullion bank, that operates exactly like JPM

And the rest of them are "authorised participants" of the GLD ETF.

Tue, 04/19/2011 - 19:04 | 1186066 jackinrichmond
jackinrichmond's picture

i doubt if there will be any real estate collapse in vancouver.  as long as there are 60,000 people a year moving into this market, it will keep going up..  it's a 'supply & demand' market, not a bubble.  prices are very strong, multi-rez is booming and the immigrants are buying with cash - actually, they are lining up in the rain for hours to buy.

  the idiots that are making the crash predictions ought to look into the numbers a bit deeper.  so please, if you don't know what you're talking about, shut up, eh

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