2021: More troubles likely

Most people expect that the economy of 2021 will be an improvement from 2020. I don’t think so. Perhaps COVID-19 will be somewhat better, but other aspects of the economy will likely be worse.

Back in November 2020, I showed a chart illustrating the path that energy consumption seems to be on. The sharp downturn in energy consumption has occurred partly because the cost of oil, gas and coal production tends to rise, since the portion that is least expensive to extract and ship tends to be removed first.

At the same time, prices that energy producers are able to charge their customers don’t rise enough to compensate for their higher costs. Ultimate customers are ordinary wage earners, and their wages are not escalating as rapidly as fossil fuel production and delivery costs. It is the low selling price of fossil fuels, relative to the rising cost of production, that causes a collapse in the production of fossil fuels. This is the crisis we are now facing.

Figure 1. Estimate by Gail Tverberg of World Energy Consumption from 1820 to 2050. Amounts for earliest years based on estimates in Vaclav Smil’s book Energy Transitions: History, Requirements and Prospects and BP’s 2020 Statistical Review of World Energy for the years 1965 to 2019. Energy consumption for 2020 is estimated to be 5% below that for 2019. Energy for years after 2020 is assumed to fall by 6.6% per year, so that the amount reaches a level similar to renewables only by 2050. Amounts shown include more use of local energy products (wood and animal dung) than BP includes.

With lower energy consumption, many things tend to go wrong at once: The rich get richer while the poor get poorer. Protests and uprisings become more common. The poorer citizens and those already in poor health become more vulnerable to communicable diseases. Governments feel a need to control their populations, partly to keep down protests and partly to prevent the further spread of disease.

If we look at the situation shown on Figure 1 on a per capita basis, the graph doesn’t look quite as steep, because lower energy consumption tends to bring down population. This reduction in population can come from many different causes, including illnesses, fewer babies born, less access to medical care, inadequate clean water and starvation.

Figure 2. Amounts shown in Figure 1, divided by population estimates by Angus Maddison for earliest years and by 2019 United Nations population estimates for years to 2020. Future population estimated to be falling half as quickly as energy supply is falling in Figure 1. World population drops to 2.8 billion by 2050.

What Is Ahead for 2021?

In many ways, it is good that we really don’t know what is ahead for 2021. All aspects of GDP production require energy consumption. A huge drop in energy consumption is likely to mean disruption in the world economy of varying types for many years to come. If the situation is likely to be bad, many of us don’t really want to know how bad.

We know that many civilizations have had the same problem that the world does today. It usually goes by the name “Collapse” or “Overshoot and Collapse.” The problem is that the population becomes too large for the resource base. At the same time, available resources may degrade (soils erode or lose fertility, mines deplete, fossil fuels become harder to extract). Eventually, the economy becomes so weakened that any minor disturbance – attack from an outside army, or shift in weather patterns, or communicable disease that raises the death rate a bit – threatens to bring down the whole system. I see our current economic problem as much more of an energy problem than a COVID-19 problem.

We know that when earlier civilizations collapsed, the downfall tended not to happen all at once. Based on an analysis by Peter Turchin and Sergey Nefedov in their book, Secular Cycles, economies tended to first hit a period of stagflation, for perhaps 40 or 50 years. In a way, today’s economy has been in a period of stagflation since the 1970s, when it became apparent that oil was becoming more difficult to extract. To hide the problem, increasing debt was issued at ever-lower interest rates.

According to Turchin and Nefedov, the stagflation stage eventually moves into a steeper “crisis” period, marked by overturned governments, debt defaults, and falling population. In the examples analyzed by Turchin and Nefedov, this crisis portion of the cycle took 20 to 50 years. It seems to me that the world economy reached the beginning of the crisis period in 2020 when lockdowns in response to the novel coronavirus pushed the weakened world economy down further.

The examples examined by Turchin and Nefedov occurred in the time period before fossil fuels were widely used. It may very well be that the current collapse takes place more rapidly than those in the past, because of dependency on international supply lines and an international banking system. The world economy is also very dependent on electricity–something that may not last. Thus, there seems to be a chance that the crisis phase may last a shorter length of time than 20 to 50 years. It likely won’t last only a year or two, however. The economy can be expected to fall apart, but somewhat slowly. The big questions are, “How slowly?” “Can some parts continue for years, while others disappear quickly?”

Some Kinds of Things to Expect in 2021 (and beyond)

[1] More overturned governments and attempts at overturned governments.

With increasing wage disparity, there tend to be more and more unhappy workers at the bottom end of the wage distribution. At the same time, there are likely to be people who are unhappy with the need for high taxes to try to fix the problems of the people at the bottom end of the wage distribution. Either of these groups can attempt to overturn their government if the government’s handling of current problems is not to the group’s liking.

[2] More debt defaults.

During the stagflation period that the world economy has been through, more and more debt has been added at ever-lower interest rates. Much of this huge amount of debt relates to property that is no longer of much use (airplanes without passengers; office buildings that are no longer needed because people now work at home; restaurants without enough patrons; factories without enough orders). Governments will try to avoid defaults as long as possible, but eventually, the unreasonableness of this situation will prevail. The impact of defaults can be expected to affect many parts of the economy, including banks, insurance companies and pension plans.

[3] Extraordinarily slow progress in defeating COVID-19.

There seems to be a significant chance that COVID-19 is lab-made. In fact, the many variations of COVID-19 may also be lab made. Researchers around the world have been studying “Gain of Function” in viruses for more than 20 years, allowing the researchers to “tweak” viruses in whatever way they desire. There seem to be several variations on the original virus now. A suicidal/homicidal researcher could decide to “take out” as many other people as possible, by creating yet another variation on COVID-19.

To make matters worse, immunity to coronaviruses in general doesn’t seem to be very long lasting. According to an October 2020 article, 35-year study hints that coronavirus immunity doesn’t last long. Analyzing other coronaviruses, it concluded that immunity tends to disappear quite quickly, leading to an annual cycle of illnesses such as colds. There seems to be a substantial chance that COVID-19 will return on an annual basis. If vaccines generate a similar immunity pattern, we will be facing an issue of needing new vaccines every year, as we do with the flu.

[4] Cutbacks on education of many kinds.

Many people getting advanced degrees find that the time and expense did not lead to an adequate financial reward afterwards. At the same time, universities find that there are not many grants to support faculty, outside of the STEM (Science, Technology, Engineering and Math) fields. With this combination of problems, universities with limited budgets make the financial decision to reduce or eliminate programs with reduced student interest and no outside funding.

At the same time, if local school districts find themselves short of funds, they may choose to use distance learning, simply to save money. This type of cutback could affect grade school children, especially in poor areas.

[5] Increasing loss of the top layers of governments.

It takes money/energy to support extra layers of government. The UK is now completely out of the European Union. We can expect to see more changes of this type. The UK may dissolve into smaller regions. Other parts of the EU may leave. This problem could affect many countries around the world, such as China or countries of the Middle East.

[6] Less globalization; more competition among countries.

Every country is struggling with the problem of not enough jobs that pay well. This is really an energy-related problem. Instead of co-operating, countries will tend to increasingly compete, in the hope that their country can somehow get a larger share of the higher-paying jobs. Tariffs will continue to be popular.

[7] More empty shelves in stores.

In 2020, we discovered that supply lines can break, making it impossible to purchase products a person expects. In fact, new governmental rules can have the same impact, for example, if a country bans travel to its country. We should expect more of this in 2021, and in the years ahead.

[8] More electrical outages, especially in locations where reliance on intermittent wind and solar for electricity is high.

In most places in the world, oil products were available before electricity. On the way down, we should expect to see the reverse of this pattern: Electricity will disappear first because it is hardest to maintain a constant supply. Oil will be available, at least as long as is electricity.

There is a popular belief that we will “run out of oil,” and that renewable electricity can be a solution. I do not think that intermittent electricity can be a solution for anything. It works poorly. At most, it acts as a temporary extender to fossil fuel-provided electricity.

[9] Possible hyperinflation, as countries issue more and more debt and no longer trust each other.

I often say that I expect oil and energy prices to stay low, but this doesn’t really hold if many countries around the world issue more and more government debt as a way to try to keep businesses from failing, debt from defaulting, and stock market prices inflated. There is a danger that all prices will inflate, and that sellers of products will no longer accept the hyperinflated currency that countries around the world are trying to provide.

My concern is that international trade will break down to a significant extent as hyperinflation of all currencies becomes a problem. The higher prices of oil and other energy products won’t really lead to any more production because prices of all goods and services will be inflating at the same time; fossil fuel producers will not get any special benefit from these higher prices.

If a significant loss of trade occurs, there will be even more empty shelves because there is very little any one country can make on its own. Without adequate goods, population loss may be very high.

[10] New ways of countries trying to fight with each other.

When there are not enough resources to go around, historically, wars have been fought. I expect wars will continue to be fought, but the approaches will “look different” than in the past. They may involve tariffs on imported goods. They may involve the use of laboratory-made viruses. They may involve attacking the internet of another country, or its electrical distribution system. There may be no officially declared war. Strange things may simply take place that no one understands, without realizing that the country is being attacked.


We seem to be headed for very bumpy waters in the years ahead, including 2021. Our real problem is an energy problem that we do not have a solution for.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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3,373 Responses to 2021: More troubles likely

  1. VFatalis says:

    Steven Quay’ bayesian analysis concludes beyond a reasonable doubt (99.8%) that SARS-CoV-2 is not a natural zoonosis but instead is laboratory derived.

  2. German Health Minister admits at the Davos World Economic Forum virtual meeting that they are not willing to stop their Corona-Terror until the entire world population’s DNA is mRNA modified and the Great Reset done!

  3. Mirror on the wall says:

    Free speech just ain’t what it used to be in Britain. For many Brits it is only a matter of time before they have a mouth off that crosses the line and they can get a knock on the door. Which I suppose is fair enough as no society really has or supports free speech. A society makes its own rules and its own karma.

    > More than 3,300 people were detained and questioned last year over so-called trolling on social media and other online forums, a rise of nearly 50 per cent in two years, according to figures obtained by The Times.

    The total number of arrests under the act, which also criminalises public online messages that are “grossly offensive or of an indecent, obscene or menacing character”, is likely to be much higher because the request for data was rejected by 13 forces and two did not provide adequate information.


    • well I don’t think we want to go back to the sort of ‘free speech’ society where you can scream any kind of racial religious or homophobic abuse at anyone you like, or post restrictions on who you will rent a home to, or give employment to.

      Or do you?

      living by some rules makes society better for everyone in the long term, even if a few of them don’t fit your own personal inclinations.

      • Mirror on the wall says:

        There are some things that the British state takes very seriously, like protection from any abusive or insulting comments about religious, racial or s/xual groups, especially minority groups like blacks, Muslims or gays; personal harassment or abuse; interruption with the normal course of democracy is taken very seriously; and speech offenses can result in prison sentences.

        But at the end of the day, a society makes its own rules, it lives by its own ethos, and that is fair enough. The important thing in any civilised society is that the rules are applied equally to all. And that is so in Britain now, all it takes is an online form to report people for speech offences. If that is how a society chooses to function then that is fair enough. Sadly for some Brits, it is only a matter of time before they have a mouth off that crosses the line but that is their choice in any society.

        • Tim Groves says:

          Does this mean I can make a complaint about Norman for using unkind and grossly offensive words to describe Donald Trump and his supporters, and he will get a knock on the door from PC Plod? That’s tempting!

          • Robert Firth says:

            Sorry, no. Males, heterosexuals, white people and conservatives need not apply under these laws. And in many parts of the country, of course, underage girls have no protection whatsoever. It is called “multiculturalism”, and under Joe Biden it will soon be coming to every city in the US.

            • Mirror on the wall says:

              That is not true. Anyone who abuses or harasses anyone, eg. calls them names, mocks their name, slanders them, makes personal accusations about them or their motives, or is generally abusive or harassing in any way can be reported. But only if they live UK. Anyone can report them however.

              They have to ask themselves, is this socially acceptable behaviour – or legally acceptable behaviour – in UK? The UK police take online abuse and harassment very seriously and thousands of Brits are arrested each year. Also any abuse of or harassment of racial, religious or s/xual groups can be reported. That is the law of the land as it stands in UK as it is and has been broken.

              UK does not put free speech and exchange of attitudes, ideas and information above all, and certainly not personal harassment and abuse, and that is fair enough. Every society has its laws, infringements of which are punishable. As I understand you are in Malta, which puts you personally out of UK jurisdiction though I am guessing that Malta also has its own laws?

            • in a reasonably civilised society there shouldn’t be a need to harass or abuse anyone

              some people are able to deal with it with tolerant humour, but some can’t do that–just human nature

            • Very Far Frank says:

              There comes a time when ‘civilised’ society begins to eat itself.

              It becomes sheltered and complacent, and oh-so naive; at that point, it becomes preferable to restore a little incivility.

            • Mirror on the wall says:

              Then you had better watch what you say – especially with a moniker like that, which UK police are liable to take a very dim view of.

          • Mirror on the wall says:

            It means that you can report anyone who crosses the line according to UK speech laws. That is how the system works.

            • Artleads says:

              Where I live in the US, I’ve been “reported” (to someone who messaged me to enquire) for not wearing or supporting masks. `(But I do wear and support masks.) So I suppose what they targeted me for was posting content that didn’t fit with MSM messaging on just about any other subject. The masks were a convenient ploy.

            • Robert Firth says:

              No argument that you can report them; however, will the report be acted upon? Recently, a father who reported his underage daughter had been gang raped by you know who was threatened with prosecution for hate speech. A Labour politician who said girls need more protection was expelled from the party, and another published an article saying these gang rapes should not be reported in the name of multiculturalism.

              The evidence that these “hate speech” laws are selectively enforced is overwhelming. Nazi Germany also had hate speech laws, enforced only against people who spoke against Nazis.

            • Mirror on the wall says:
          • the don’s henchpeople have already been in threatening touch.

            I went through each alleged offence, I played back relevant video recordings spoken by the orange man himself. condemned out of his own mouth.

            no case to answer was the verdict,

            I am pleased in one sense though, because as far as I can recall—I have never used grossly offensive Language in here (I call that lazy writing), or anywhere else. (RL or otherwise)

            instead I paint word pictures. if a reader sees something grossly offensive in the words I put together, then I consider that I’ve made my point successfully, without demeaning my own keyboard.

            Maybe you have neighbours with blue faces who wear fur hats with horns, so regard it as normal. I don’t. It isn’t necessary for me to paint any kind of descriptive word picture there.

            • Artleads says:

              Having encountered ghoulish “threats” myself, I sympathize with anyone else experiencing them. In my case, the threats came from the “left.”

            • my genuine sympathies Artleads. I know I joke about things, but that isn’t funny..

              That said, there does seem the be a collective hysteria about the USA. I can’t precisely define what it is. An acquaintance from Tn, living in Ireland, said:’ here everything is just sane and normal’. (The Irish are just a bit crazy too but in a lovely way.)

              We have our fair share of crazies here too, but of course they are not armed to the teeth. which makes a difference.

              My own experience of the USA is very limited, but I judge on the last border crossing–Canada into USA– took 85 minutes. Paperwork in perfect order, crossing not busy (it was midnight) I wasn’t wearing a sombrero or a turban.

              Chatting next day to a group of 3 friendly policemen in USA, mainly because of my English accent, was just like chatting to 3 English policemen, except for the artillery.

              Crossing back into Canada 2 days later took 30 seconds with a cheery wave and ‘welcome to canada’

              To me that says ‘paranoia’. I think that paranoia filters down from the top.

              I see that the vote rigging thing is now hitting state elections.

              that nice mr trump has given license to every nutcase to come out of the woodwork

            • Artleads says:

              Thanks, Norman. I was born before the start of WWII, and so I remember the wars quite well. And the many wars since then. But I was alway way inside the protected zone of the “allied” world all this time. Now, for the first time, the danger is personal.The global situation has deteriorated to a place where we are split down the middle. One side says, you must do as we see fit, or you will be labeled a terrorist and a danger to all. And for the good of the collective, you can be persecuted, confined, or even killed. Then the other side has to counter by saying, I’ll then have to kill you before you kill me. We now have the infrastructure (though Homeland Security, the Patriot Act, FEMA, etc.) to do these horrible things without it waking anybody up. The entertainment and misinformation industries keeps everyone fat and happy. Given this unhappy scenario, it doesn’t seem to matter much which side you’re on. In either alternative, your situation is untenable.

      • NomadicBeer says:

        Is this a trick question? The answer is of course I would prefer to live in a free speech society.
        But based on your huge amount of comments here you are a retiree from the comfortable managerial class and you don’t give a sh*t about anybody else.
        In US it’s perfectly fine to imprison 10% of black males or to abuse their rights (using them as cash cows for the police and prison system) as long as you don’t use the N word. On the contrary they use the cultural norms that YOU support to make sure the systemic issues are never addressed. Anybody that tries to raise questions is immediately labeled racist or Uncle Tom and dismissed.
        Why would you think otherwise? Every time free speech is restricted the purpose is to stop dialogue, nothing else.

        Or closer to your insane political inclinations, it looks now that any questioning of an election has become de facto illegal – people are cancelled and even arrested for doubting the “official” results. Do you think that will not be used against your preferred candidate next time? Are you that stupid?

        This is not a rhetorical question. I saw the same thing happen to the republicans which are now attacked using the laws they supported during Bush era. To believe that your side won’t do the same beggars belief.

        • I will try to answer your point politely, as best I can. I find politeness punctures self inflated pompous rage.
          It is a rage against something, I feel I’m just today’s focus for it. No idea what it is. Tomorrow might be someone else’s lucky day.

          if you actually read my comments, in depth, you might conclude that I care a great deal about what happens to everybody else.

          I sense a little resentment that I come from the ‘comfortable managerial class.’ I was self employed for over 30 years. Just me against the world.
          Jumping to conclusions can land you in some messy do- do’s. Though you probably wouldn’t notice one more pile you’ve dropped into.

          my comments, the long winded ones anyway, are usually barbed to deflate conspiracy balloons. I just ‘observe’ from afar. I don’t have a ‘side’.
          Other than the ‘side’ that’s been warning about unequal wealth distribution for years. (maybe you missed that bit?) Or the ‘side’ that’s been warning about USA breakup for years.

          I get the frightening feeling that the ‘sides’ you speak of will be at each other’s throat in earnest before long.

          still trying to figure out just what ‘cultural norms’ I support.

          And my comments numbers are not huge compared to some—though I guess if they annoy you so much, they may look that way. I don’t take any of it seriously. It might help your blood pressure if you didn’t

          You could just try pressing delete.
          I wouldn’t be offended.

  4. Harry McGibbs says:

    “Biden’s fist looms large as US banks prosper during Covid crisis: Finance bosses enjoy record profits and look set to make yet more, but challenges to their hegemony are on the way…

    “Resentment among ordinary people affected by the pandemic may already be building.”


    • Very Far Frank says:

      Repeating myself, but Biden got 95% of Wall Street’s campaign money in the last election. The notion that he’ll do anything other than to further enrich banks (as well as himself) is hilarious.

      Being a ‘conservative’ newspaper, you’d think the Telegraph would bring that up, but in media-land, up is down.

  5. Harry McGibbs says:

    “Magic money is blinding us to the dangerous reality of inflation

    “Signs of inflation are everywhere, from stocks, bonds and real estate to goods and services. Yet analysts and fund managers continue to argue that asset inflation is nothing to be feared…”


    • Harry McGibbs says:

      “Though inflation remains low, investors worry that the Fed could start to taper its market purchases unexpectedly should conditions change and that could cause another period of market tumult.”


    • I would say that magic money is blinding us the dangerous reality of broken supply lines and less product available in total. Something has to break. Higher inflation or something else.

    • Sergey says:

      It’s just phenomenal what we still have oil at $50 after all these money printings.

      • Well, it could be even worse.

        As the next round of this incoming monster ~stagflation actually could completely bypass (on the price inflation side) the energy sector (for most of the time before the ultimate supply crunch hitting the core countries) – weird but it could happen just like that..

        Even in the geopolitical scenario of China-Russia- .. finally outplaying the US/EU – the energy pricing would be managed (and kept low-ish) to large degree anyway. Obviously, there could be temporary super spikes.

        But there are many scenarios jockeying for the lead role, and more over they will likely exchange ~rapidly each other through some new historical sequence.

  6. Harry McGibbs says:

    “In Russia, Economic Slump Erodes Consensus That Shielded Putin:

    “In Russia, the competition between the rally-around-the-flag effect of Putin’s assertive foreign policy and anger over the sagging economy is often referred to as the battle between the television and the refrigerator: Do Russians pay attention to the patriotic news on TV or notice their empty fridges?”


    • Harry McGibbs says:

      “Tens of thousands of people in dozens of cities across Russia defied a heavy police presence to protest on Sunday in support of jailed opposition activist Alexei Navalny for the second straight week.

      “The Kremlin made unprecedented efforts to stop the protesters repeating their triumph of last Saturday…”


    • I expect the battle between the television and refrigerator happens elsewhere as well.

      • Minority Of One says:

        Here springs to mind. Must be a lot of Scots /Brits with almost empty fridges. But for now the huge tv screens with what seems like an infinite amount of guff to choose from helps, as does having a nifty mobile phone.

  7. Harry McGibbs says:

    “Shares in listed companies linked to China’s HNA Group slumped on Monday, after the troubled conglomerate disclosed that its creditors had applied for its bankruptcy and that nearly $10 billion had been embezzled by shareholders of its three units…

    “HNA, once one of China’s most high-flying firms, said late on Friday its creditors had applied to a Hainan court for the company to be placed in bankruptcy and restructured.”


    • Robert Firth says:

      People about to invest in “high flying firms” should perhaps remember the story of Icarus:

      • Harry McGibbs says:

        Robert, I often think of Icarus as a very apt metaphor in general for the inevitable ultimate triumph of physical limits over man’s technological brilliance.

    • Wikipedia says,

      HNA Group Co., Ltd., is a Chinese conglomerate headquartered in Haikou, Hainan, China. Founded in 2000, it is involved in numerous industries including aviation, real estate, financial services, tourism, logistics, and more.[2] It is a part owner of Grand China Air, and owns 25% of Hilton Worldwide.[3] In July 2017, HNA Group ranked No. 170 in 2017 Fortune Global 500 list with a revenue of $53.335 billion.[4] It is one of the most active investment companies in the world, acquiring numerous assets under its name.[5][6] In 2021, the corporation declared bankruptcy after debt restructuring efforts failed.[7]

      How is it possible to embezzle $10 billion on revenue of $53 billion?

      • Minority Of One says:

        “HNA, once one of China’s most high-flying firms, said late on Friday its creditors had applied to a Hainan court for the company to be placed in bankruptcy and restructured.”

        How can a company be restructured when it has embezzled $10 B? You might think the top priority might be to get rid of the people responsible then figure where you stand financially before any restructuring took place. On the other hand, this is China.

  8. Harry McGibbs says:

    “Activity in China’s oil futures market has risen to record levels as the country seeks to develop the role of its currency in a trade dominated by the US dollar…

    “A rise in trading and positions in the contracts, which were launched in 2018, forms part of a longer-term push by Beijing to establish renminbi-denominated markets that ultimately seek to challenge the dollar’s dominance.”


  9. “Chemists are reimagining recycling to keep plastics out of landfills
    “Too much of today’s plastic is impossible to recycle”


    Doesn’t most “plastic” come from “heavy” (“long-chain”) oil, anyway?
    I’ve read that much of the “microplastics” in the oceans is little cigar-shaped pieces of tire material washed into the sea, & that nearly half of the marine life has disappeared, since the mid-1900s.

    • Minority Of One says:

      Seems to me like trashing the oceans is another way of taking out life on Earth.

      Best estimates are 300 million tonnes of plastic in the oceans, or 300 M M M micrograms. No wonder all fish / seafood contain microplastics.

    • Discussions I have heard at conferences lead me to believe that plastics often come from short-chain oil. Short-chain oil is gasses of various kinds. These tend to be very low valued to begin with–too low valued to want to build pipelines for. The other alternative would be flaring the gas, if it were permitted.

      Trying to use recycling to compete with such a low valued product seems like an exercise in futility.

    • Artleads says:

      If we round up every bit of landfill-destined plastic and embed it in massive wads of inert “plaster” that should keep plastic out of the oceans for some time. The plastic that’s there already is another matter. There simply is no “out there” nature anymore, and the new locus of “production” must be inside buildings?

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