Posted at 5:58 PM (CST) by & filed under In The News.

My Dear Extended Family,

Cycles are best understood as probabilities for directional movement. Those gold cycles that turned down at $1900 have now turned up with the price of gold now plumbing previous lows which are by definition major support.

The price objective once this experience is over is $2100, and is where it will trade in time.

Sincerely,
Jim

 

Jim Sinclair’s Commentary

What is left of the middle class is living on its credit cards.

American credit-card debt hits a post-recession high
Published: Sept 13, 2014 8:02 a.m. ET

U.S. consumers may be relying too heavily on their plastic.

Americans added $28.2 billion to their credit cards in the second quarter of 2014, the largest amount in the last six years and nearly 200% more than in the second quarter of 2009, when the economy emerged from the depths of the Great Recession, according to new research from personal finance website CardHub.com. After paying off $32.5 billion owed during the first quarter of 2014, consumers ran up roughly 86% more debt during the following quarter.

The average household’s credit-card balance now stands at $6,802, up slightly from $6,628 in the first quarter, but still down from $8,431 at the end of 2008. By the end of the year, this figure is expected to exceed $7,000, reaching levels not seen since the end of 2010. U.S. consumers will be roughly $1,300 away from the credit card debt “tipping point,” where minimum payments become unsustainable and delinquencies skyrocket, the report says.

Experts say that consumer spending accounts for more than two-thirds of U.S. economic output, and credit-card spending in particular shows that people are feeling more confident about their job security and the economic recovery. Earlier this week, the U.S. Federal Reserve said that outstanding revolving credit, which is mostly made up by credit-card debt, increased by 7.4% in July to $880.54 billion, and has been gradually rising since falling to $840 billion in 2010.

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Jim Sinclair’s Commentary

Problems increase along with the equity markets. That is not a condition with legs.

World Bank warns of global jobs crisis
Sun, Sep 14, 2014, 9:05AM EDT

The world is facing a global jobs crisis that is hurting the chances of reigniting economic growth and there is no magic bullet to solve the problem, the World Bank warned on Tuesday.

In a study released at a G20 Labour and Employment Ministerial Meeting in Australia, the Bank said an extra 600 million jobs needed to be created worldwide by 2030 just to cope with the expanding population.

"There’s little doubt there is a global jobs crisis," said the World Bank’s senior director for jobs, Nigel Twose.

"As this report makes clear, there is a shortage of jobs — and quality jobs.

"And equally disturbingly, we’re also seeing wage and income inequality widening within many G20 countries, although progress has been made in a few emerging economies, like Brazil and South Africa."

He said that overall emerging market economies had done better than advanced G20 countries in job creation, driven primarily by countries such as China and Brazil, but the outlook was bleak.

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Jim Sinclair’s Commentary

The two very soft loans are education and transportation. This is the road to the new subprime crisis.

More car owners fall behind on auto loan payments
Chris Woodyard, USA TODAY 3:52 p.m. EDT September 9, 2014

More car buyers are falling behind when it comes to payments on their auto loans, a new report says.

The auto loan delinquency rate — borrowers who are at least 60 days behind on their loans — rose to 0.95% in the second quarter, up more than 9% from 0.87% the same quarter a year ago, reports TransUnion, the big credit bureau.

Even with the increase, though, the second-quarter delinquency rate is still below the average of 1.05% seen from 2007 to 2014, which encompassed the recession, TransUnion says. The peak came in the fourth quarter of 2008 when the rate hit 1.59%, and the low was in the second quarter of 2012 when it fell to 0.86%.

"Delinquency rates remain relatively low while auto loan balances keep rising," says Peter Turek, a TransUnion vice president, in a statement.

The amount owed on the average auto loan was $17,090 in the second quarter, up 4.1% from $16,410 in the prior year. Auto loan balances rose in every city, with the biggest increases in Houston and Phoenix.

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Jim Sinclair’s Commentary

The return of Braveheart?

Investors pull £17bn from UK as banks ratchet up Scottish independence pressure
Net flows out of Britain hit $27.3bn (£16.8bn) in August, the highest seen since the financial crisis
By Peter Spence, and Alan Tovey
8:01PM BST 12 Sep 2014

Investors have pulled money out of the UK at the fastest pace seen since the financial crisis of 2008 amid fears that Scotland will break away from the Union, triggering a broader political crisis.

Net flows out of Britain hit $27.3bn (£16.8bn) in August, the highest seen since Lehman Brothers collapsed, according to investment advisory firm CrossBorder Capital.

“Sterling outflows have been an issue since the end of June, but they really gathered pace in August,” said Michael Howell, managing director of CrossBorder Capital, who compiled the index of UK financial investment.

The report shows that inflows have “effectively collapsed”, said Mr Howell, adding that only Japan is now seeing money being pulled out of the country at a faster rate.

So far this year the UK has experienced a net $206bn (£127bn) outflow, as money available for financial investment left the country. In 2013, a net $63bn (£39bn) flowed into the nation’s economy.

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Pope Francis says World War Three has began
DEBKAfile September 13, 2014, 11:16 PM (IDT)

Pope Francis said Saturday that the conflicts around the globe today were effectively a “piecemeal Third World War.” During a visit to Italy’s war memorial to the World War One dead, he blamed the arms trade and “plotters of terrorism”for  sowing death and destruction. “This is the time to weep,” he said.

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Kohl’s And The Rest Of The Retailers Are In Deep Trouble
Submitted by Tyler Durden on 09/14/2014 09:10 -0400

Submitted by Jim Quinn of The Burning Platform

Kohl’s And The Rest Of The Retailers Are In Deep Doo Doo

“Facts are stubborn things, but statistics are pliable.” ? Mark Twain

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I never believe government manufactured numbers. They will always be adjusted, massaged, and manipulated to achieve a happy ending for the propagandists attempting to control and fleece the sheep. Yesterday, the government produced retail sales numbers for August that were weak and the corporate MSM propaganda machine immediately threw up bold headlines declaring how strong these numbers were. Positive stories were published on the interwebs and Wall Street hack economists were rolled out on CNBC, where the bubble headed bimbos and prostitutes for the status quo like Jim Cramer and Steve Liesman declared the recovery gaining strength. Woo Hoo.

If everyone else is whipping out that credit card, why aren’t you? Credit card debt has reached a new post recession high. They tell me consumer confidence is soaring. Forget about the 92 million working age Americans supposedly not in the labor force. Forget about real household income hovering at 1999 levels. Forget about median household net worth still 30% lower than 2007. Forget about what you see with your own two eyes in malls, strip centers and office parks as you motor around our suburban sprawl empire of debt. Those Store Closing, Space Available, and For Lease signs mean nothing.

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Posted at 11:20 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

John Williams shares the following with us.

- U.S. Economy Re-Entered Recession in 2013, Indicated by the BLS’s Annual Consumer Expenditure Survey 
- 2013 Total Money Income Fell Even Before Inflation Adjustment 
- Physical Gold, a Life Preserver That Could See Action Soon 
- Day-to-Day Timing of a Great Financial Disaster Is a Tough Call, But the Alarm Bells Are Sounding 
- Strong Headline Retail Sales Gain Was Not Statistically Significant

"No. 656: 2013 Consumer Expenditures, August Retail Sales, Gold" 
Web-page: http://www.shadowstats.com

 

Jim Sinclair’s Commentary

Now the Fed can blame housing on the weather again.

Autumnlike Chill, Frost to Grip East This Weekend
Alex Sosnowski, Expert Senior Meteorologist
September 13, 2014; 4:05 PM ET

Following a chilly rain during part of the weekend, the coolest air since the spring will settle over the Northeast Sunday night into Monday morning.

Temperatures are forecast to dip into the 50s from Boston and New York City to Philadelphia and Washington, D.C. The last time readings were this low was during the first couple of days of June in most cases and in late May in others.

The northern and western suburbs of the Interstate-95 cities will dip well down into the 40s. Cities forecast to drop into the 40s this weekend include Pittsburgh, Buffalo, New York, and Burlington, Vermont.

Some locations from northern Pennsylvania, upstate New York and northwestern New England will dip into the 30s. Provided skies remain clear and winds diminish, there is a risk of scattered frost for a few hours late Sunday night into Monday morning.

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Jim Sinclair’s Commentary

This is going to blow back hard on the EU soon.

Sweeping new US and EU sanctions target Russia’s banks and oil companies
Putin remains defiant as Russian companies such as Sberbank and Gazprom are barred from western capital in dramatic sanctions over Ukraine
Dan Roberts in Washington
The Guardian, Friday 12 September 2014 12.41 EDT

A monument to Ukrainian poet and writer Taras Shevchenko is silhouetted against an apartment building with a sign advertising Russia’s natural gas giant Gazprom, in Moscow. Photograph: Alexander Zemlianichenko/AP

Russia’s largest banks, oil producers and defence companies will be cut off from international finance and technology under sweeping new economic sanctions announced by the US and Europe that substantially escalate western political pressure over Ukraine.

In coordinated moves that may unnerve already jittery financial markets, the US Treasury and European Union announced on Friday that Russia’s largest bank, Sberbank, would be barred from accessing their capital markets for any long-term funding, including all borrowing over 30 days.

Existing 90-day lending bans affecting six other large Russian banks will also be tightened to 30-days, something US officials claim will sharply increasing their borrowing costs and deny access to important dollar-denominated funding sources.

Even more draconian measures were imposed on the Russian energy industry, where the US and Europe are attempting to shut down important new exploration projects in Siberia and the Arctic by barring foreign oil companies from providing any equipment, technology or assistance to deepwater, offshore, or shale projects.

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Jim Sinclair’s Commentary

Eventually Russia will retaliate against the EU, the easiest target.

Sweeping new US and EU sanctions target Russia’s banks and oil companies
Putin remains defiant as Russian companies such as Sberbank and Gazprom are barred from western capital in dramatic sanctions over Ukraine
Dan Roberts in Washington
Friday 12 September 2014 12.41 EDT

Russia’s largest banks, oil producers and defence companies will be cut off from international finance and technology under sweeping new economic sanctions announced by the US and Europe that substantially escalate western political pressure over Ukraine.

In coordinated moves that may unnerve already jittery financial markets, the US Treasury and European Union announced on Friday that Russia’s largest bank, Sberbank, would be barred from accessing their capital markets for any long-term funding, including all borrowing over 30 days.

Existing 90-day lending bans affecting six other large Russian banks will also be tightened to 30-days, something US officials claim will sharply increasing their borrowing costs and deny access to important dollar-denominated funding sources.

Even more draconian measures were imposed on the Russian energy industry, where the US and Europe are attempting to shut down important new exploration projects in Siberia and the Arctic by barring foreign oil companies from providing any equipment, technology or assistance to deepwater, offshore, or shale projects.

The bans will prevent previously active companies such as Exxon and Shell from dealing with five of the largest Russian oil producers and pipeline operators: Gazprom, Gazprom Neft, LukOil, Surgutneftegas, and Rosneft.

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Posted at 10:22 PM (CST) by & filed under Jim's Mailbox.

Jim,

A "bit strange" is a significant understatement given that the truce is still in effect. I would not be surprised if Russia considers the following:

  1. Significant counter-sanctions  to the EU targeting German auto and chemical firms in particular.
  2. Terminating NG shipments to Poland and the Baltic States.  This would put the EU in a quandary as to help these countries at the expense of Ukraine.
  3. Ships a very advanced anti-aircraft missile systems (manned by Russians) to Syria to demonstrate Russia’s support for Assad.
  4. Shuts down NATO’s Northern Distribution Network to Afghanistan.

CIGA Craig

U.S., EU hit Russia with more sanctions despite Ukraine ceasefire
By Gareth Jones and Darya Korsunskaya
KIEV/DUSHANBE Sat Sep 13, 2014 12:59am BST

The United States and European Union imposed new sanctions against Russia on Friday, tightening financial measures against Moscow over its intervention in Ukraine despite a week-old ceasefire which has brought calm to the embattled east.

President Vladimir Putin called the new sanctions "a bit strange" given the truce, part of a peace deal reached last week between Kiev and pro-Russian rebels.

New sanctions from the European Union would limit access by Russian oil companies to funds. Sanctions from the United States hit Russia’s biggest bank and an arms maker, and bar U.S. firms from helping five big Russian oil companies explore hard to reach deposits.

Washington and Brussels have steadily tightened economic sanctions against Russia since it annexed Ukraine’s Crimea peninsula in March.

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Posted at 12:52 PM (CST) by & filed under In The News.

Russia warns US against strikes on Islamic State in Syria
11 September 2014 Last updated at 11:36 ET

A Russian foreign ministry spokesman said any such action, without the backing of the UN, would be "an act of aggression".

It comes as US Secretary of State John Kerry meets Arab leaders in Saudi Arabia to try to build a coalition against Islamic State (IS) militants.

President Obama has threatened action against IS in Syria as well as Iraq.

IS controls large parts of Syria and Iraq after a rapid military advance.

In a speech outlining his strategy, Mr Obama said any group that threatened America would "find no safe haven".

He also announced that 475 US military personnel would be sent to Iraq but said they would not have a combat role.

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Turkey refuses US permission for combat missions against ISIS: official
Agence France Presse
Sep. 11, 2014 | 01:51 PM

ANKARA: Turkey will refuse to allow a US-led coalition to attack jihadists in neighbouring Iraq and Syria from its air bases, nor will it take part in combat operations against militants, a government official told AFP Thursday.

" Turkey will not be involved in any armed operation but will entirely concentrate on humanitarian operations," the official said on condition of anonymity.

The decision echoes the country’s refusal to allow the US to station 60,000 troops in Turkey in 2003 to invade Iraq from the north, which triggered a crisis between the two allies.

Ankara then also refused Washington permission to use its air bases to attack Saddam Hussein’s regime.

Turkey has come under fire by some critics for indirectly encouraging the formation of ISIS because of its support of Islamist opponents of Syrian President Bashar Assad, and its loose control of its borders.

But Ankara vehemently denies its strategy has backfired.

US Secretary of State John Kerry was to hold talks in Saudi Arabia on Thursday to drum up support from 10 key Arab nations and Turkey, after President Barack Obama announced Washington’s new strategy against ISIS jihadists, which will include air strikes in Syria.

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Mortgage applications plunge to 14-year low
Diana Olick | @diana_olick
Wednesday, 10 Sep 2014 | 7:00 AM ET

Just a slight trend higher in interest rates was enough to stall both potential home buyers and borrowers looking to refinance their loans.

Total mortgage application volume fell 7.2 percent last week from the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association (MBA). The weekly index is now at its lowest level since December of 2000.

"Although the weekly increase in rates was small, they were trending up in the week following Labor Day, with many data reports showing a pickup in the pace of economic growth," said Michael Fratantoni, chief economist for the MBA.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.27 percent from 4.25 percent, the first increase in four weeks, according to the MBA. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000), however, decreased to 4.15 percent from 4.22 percent.

Historically, jumbo loans carry higher interest rates, but lenders today are charging borrowers more for loans backed by Fannie Mae and Freddie Mac (conforming loans) to make up for higher fees imposed by the government-sponsored entities and for higher risk.

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U.S. Jobless Claims Rose 11,000 Last Week
At Highest Level Since June, But Near Eight-Year Lows
By Jonathan House
Updated Sept. 11, 2014 10:50 a.m. ET

WASHINGTON—The number of new applications for jobless benefits rose last week to the highest level since June, but stayed near prerecession lows.

Initial claims for unemployment benefits increased by 11,000 to a seasonally adjusted 315,000 in the week ended Sept. 6, the Labor Department said Thursday. Claims for the previous week were revised higher to 304,000.

Last week’s claims level was well above the 300,000 forecast by economists surveyed by The Wall Street Journal, though it was possibly distorted by the Labor Day holiday. A Labor Department analyst noted that claims, a proxy for layoffs, tend to be especially volatile around holidays.

The four-week moving average of claims, which smooths out weekly volatility, was up 750 to 304,000. It has been trending higher since hitting a 2014 low of 293,750 in early August. But that is still well below the average for the first half of the year and remains at levels last consistently seen before the recession.

"The claims data show clear improvement in labor-market conditions over the past few months, but some modest deterioration over the most recent few weeks," said J.P. Morgan Chase economist Daniel Silver.

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Arabs Give Tepid Support to U.S. Fight Against ISIS
By ANNE BARNARD and DAVID D. KIRKPATRICK
SEPT. 11, 2014

BEIRUT, Lebanon — Many Arab governments grumbled quietly in 2011 as the United States left Iraq, fearful it might fall deeper into chaos or Iranian influence. Now, the United States is back and getting a less than enthusiastic welcome, with leading allies like Egypt, Jordan and Turkey all finding ways on Thursday to avoid specific commitments to President Obama’s expanded military campaign against Sunni extremists.

As the prospect of the first American strikes inside Syria crackled through the region, the mixed reactions underscored the challenges of a new military intervention in the Middle East, where 13 years of chaos, from Sept. 11 through the Arab Spring revolts, have deepened political and sectarian divisions and increased mistrust of the United States on all sides.

“As a student of terrorism for the last 30 years, I am afraid of that formula of ‘supporting the American effort,’ ” said Diaa Rashwan, a scholar at the Al-Ahram Center for Political and Strategic Studies, a government-funded policy organization in Cairo. “It is very dangerous.”

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Russia’s ‘carrier killer’ ship enters Mediterranean
Published September 12, 2013

Russia’s Moskva missile cruiser — called a "carrier-killer" by NATO — passed through the Straits of Gibraltar this week and is headed toward the Mediterranean to command the Russian naval force, RT.com reported.

The move comes as U.S. Secretary of State John Kerry began a critical set of meetings with Russian Foreign Minister Sergey Lavrov to assess whether Russia can present a credible plan for bringing Syrian chemical weapons under international monitoring and control.

The destroyer is reportedly expected to reach its destination by Sept. 15 or Sept. 16.

A military source told Interfax news agency that the crew is ready to perform combat missions.

Sources also said that the deployment is one of several aimed at "complex monitoring" of the situation in Syria.

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Posted at 4:01 PM (CST) by & filed under In The News.

Russia, China in talks to make alternative to SWIFT — deputy PM
September 10, 18:14 UTC+4

BEIJING, September 10. /ITAR-TASS/. Russia and China are discussing setting up a system of interbank transactions which will become an analogue to International banking transaction system SWIFT, First Deputy Prime Minister Igor Shuvalov told PRIME on Wednesday after negotiations in Beijing.

“Yes, we have discussed and we have approved this idea,” he said.

Russian authorities wanted to decrease the financial market’s dependence on SWIFT since the introduction of the first U.S. sanctions, when international payment systems Visa and MasterCard denied services to some Russian banks owned by blacklisted individuals.

According to Shuvalov, Russia has been also discussing establishment of an independent ratings agency with China. Concrete proposals will be made by the end of 2014, he said.

As regards China’s payment system UnionPay cooperation with the yet-to-be-established Russian national payment system, Shuvalov said that UnionPay is ready for a full-scale collaboration and will provide all infrastructural capacities for that.

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U.S. Jobless Claims Hit Two-Month High, Breaking Steady Decline
By Jeanna Smialek  Sep 11, 2014 8:47 AM ET 

Sept. 11 (Bloomberg) — Bloomberg’s Michael McKee reports that weekly jobless claims rose by 11,000 to 315,000 and looks at the increasing level of workforce participation in the United States. He speaks on “In The Loop.”

The number of Americans filing for unemployment benefits unexpectedly rose last week to a two-month high, interrupting a steady decrease to the lowest level since before the last recession.

Jobless claims climbed by 11,000 to 315,000 in the week ended Sept. 6, which included the Labor Day holiday, a Labor Department report showed today in Washington. It was the highest reading since June 28 and exceeded the Bloomberg survey median forecast of 300,000. The data are difficult to adjust during holiday periods, a Labor Department spokesman said as the figures were released.

Initial claims have been hovering near pre-recession lows as the labor market continues to gather strength on the heels of stronger demand. Bigger gains in hiring are probably needed to reduce slack in the labor market and prompt employers to boost wages, which could propel consumer spending.

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Russia successfully tests nuclear missile, more planned: navy chief
MOSCOW Wed Sep 10, 2014 8:59am EDT

(Reuters) – Russia carried out a successful test of its new Bulava intercontinental nuclear missile on Wednesday and will perform two more test launches in October and November, the head of its naval forces said.

The armed forces have boosted their military training and test drills since the start of the conflict in eastern Ukraine, which Russia considers in its traditional sphere of influence.

The 12-meter long Bulava, or mace, has undergone numerous tests, some successful, and can deliver an impact of up to 100 times the atomic blast that devastated Hiroshima in 1945.

Naval Commander-in-Chief Admiral Viktor Chirkov said the test launch had been carried out from the White Sea and that the test missile had hit its target in Russia’s far east.

"In October and November of this year, the naval fleet will carry out two more launches with two rocket cruisers equipped with ballistic missiles," Interfax quoted Chirkov as saying.

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Posted at 3:57 PM (CST) by & filed under King World News.

Dear CIGAs,

With major markets on the move, today James Turk told King World News that despite the recent weakness in gold, a major revaluation spike is coming in the gold market.  Turk also added some additional comments to go along with the extraordinary chart he sent to KWN yesterday.  Below are Turk’s comments and his fantastic chart.

Turk: “I think the following chart puts several key markets in their proper perspective, Eric.  It shows the correlation between the Fed’s balance sheet, S&P 500, gold and crude oil.  This is a base-100 chart that plots the relative movement in these assets at the close of each week from March 2009, which is when the Fed announced its first QE program (see chart below).

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Posted at 3:03 PM (CST) by & filed under Jim's Mailbox.

Hi Jim,

Looks like Russia and China have become the USA and Saudi Arabia of the 1970’s.

Regards,
CIGA Bosko

China, Russia to build seaport: report
Thu, Sep 11, 2014, 6:02 PM EDT

Beijing (AFP) – China and Russia will build one of the largest ports in northeast Asia on Russia’s Sea of Japan coast, reports said, in a further sign of the powerhouses’ growing alliance.

The seaport is expected to be able to handle some 60 million tonnes of cargo a year, China’s state-run People’s Daily Online reported late Wednesday — comparable to Britain’s busiest port Immingham or Le Havre in France, according to European Commission statistics.

The new facility will be located in far eastern Russia, just 18 kilometres (11 miles) away from the Chinese border. The region is also close to North Korea.

Chinese and Russian leaders inked a deal on the port at May’s Conference on Interaction and Confidence Building Measures in Asia (CICA) in Shanghai, the report said.

The move represents the latest step by Beijing and Moscow to boost their energy and infrastructure ties.

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Posted at 3:02 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

My lazy CCO.

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Polish PGNiG announced the reduction of Russian gas supplies by 24% 
10.09.2014, 15:27 | «BBC»

Polish PGNiG has recorded a reduction of Russian gas supplies, Reuters reports citing the press-secretary of Dorothy Gajewski.

"Marked decrease in gas supplies in paragraphs Drozdovychi (Ukraine), Kondratki (Belarus) and High (Belarus)," – said Gajewski.

According to her, September 8, the volumes of gas supplies from the east have decreased by 20%, September 9 – 24% compared to the planned volumes. "We find out reasons for the decline in the supply of gas from the east: is this reduction is technical or commercial character," – said the press service of PGNiG.

Poland intends to compensate for foregone gas volumes through other points of GTS.

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