Jim,

In this case it’s follow the leader (China) not the loser (US).

CIGA BJS

Tokyo still resistant to Washington base deal
Fri, 23 Oct 2009 09:11:03 GMT

The Japanese prime minister has once again expressed his country’s reluctance to keep a military deal with Washington over the presence of US forces.

"It’s about how both sides avoid risks. That’s what diplomacy is about," Premier Yukio Hatoyama told reporters on Friday. "There is no need to rush.”

In 2006, Washington and Japan’s conservative party agreed a deal to reorganize US forces in the Asian country, but Hatoyama’s Democratic Party of Japan (DPJ) ousted the conservatives, who had been in power for nearly half-century, in an August election.

More… ^[1]

Dear Mr. Sinclair,

Hope this finds you well.

Regarding your posting on Russia today:

Armstrong has something interesting to say in his cycle theory regarding the next turn of events due in Russia. Time will tell. It is something to keep in mind as the date is only months away (April 28/29, 2010).

Click here to view Armstrong’s article… ^[2]

Details are on page 42 of 77 in the Scribd link above (page 37 in Armstrong’s document).

Warm regards,
CIGA Annette

U.S. Dollar Index (UUP)
By CIGA Eric 10/23/09

Primary up and down trends are characterized by wax and wane.

Waning periods or strength in the dollar tends to be short and sweet with brief readings above 0 on momentum based oscillators.  Heavy gap resistance lies above, so don’t expect much follow through without a sign of strength in volume.

Click chart to enlarge in PDF format

^[3]

Dear Jim,

Please note the article about INTL Commodities DMCC China gold holdings.

China at 2 % of reserves in gold most countries at 10%.

China’s ‘Underweight’ Gold Holdings to Increase, Rhodes Says
China, which is "underweight" on gold holdings, will increase buying as the economy expands, said Jeffrey Rhodes, chief executive officer of INTL Commodities DMCC. China’s 1,054 tons of gold represents less than two percent of its reserves, Dubai-based Rhodes said in an interview today. That compares with the international average of 10.2 percent held by central banks worldwide which have under 30,000 tons of the metal, equivalent to about $960 billion. "Clearly China, as a percentage of holdings in gold, is underweight," Rhodes said. "You’d definitely expect China to be accumulating gold in its reserves in the coming years. So the percentage is likely to grow. Obviously it should have a significant impact on demand." China’s economy expanded 8.9 percent in the third quarter, the fastest pace in a year, as stimulus spending and record lending growth helped the nation lead the world out of recession. The country, the world’s biggest gold producer, has increased reserves by 76 percent since 2003 and has the world’s fifth- biggest holdings by country, Hu Xiaolian, head of the State Administration of Foreign Exchange, said in April. Record government debt and low interest rates have pushed gold to records as investors sought a shelter from the prospect of rising inflation and currency debasement. Gold for immediate delivery, which touched a record $1,070.80 an ounce on Oct. 14, traded at $1,058.27 as of 4:02 p.m. in Singapore. Rhodes said he didn’t expect China to sellU.S. debt to buy gold as rising wealth allows it to accumulate the metal and any sale erodes the value of their assets held in the currency of the world’s largest economy. "I don’t think they will sell dollars to buy gold," he said. "As growth and wealth accumulate in the coming years, some of the accumulation will be diverted into an increase in gold reserves." To help boost gold holdings, China may resort to domestic production, he said. "They could buy internationally but the quick fix is to absorb some of the domestic production into their reserves."

More… ^[4]

Yours,
Monty

Jim,

Green Shoots for lunch, anyone?

Regards,
CIGA Pedro

U.K. Economy Unexpectedly Shrinks in Longest Slump (Update2)
By Jennifer Ryan

Oct. 23 (Bloomberg) — U.K. gross domestic product unexpectedly dropped in the third quarter as enduring slumps in services, manufacturing and construction kept the economy mired in its longest recession on record. The pound tumbled.

GDP fell 0.4 percent from the previous three months, the Office for National Statistics said today in London. Economists predicted a 0.2 percent increase, according to the median of 33 forecasts in a Bloomberg News survey. None forecast a contraction. The economy has now shrunk over six quarters, the most since records began in 1955.

The figures add to Prime Minister Gordon Brown’s woes as he struggles to cement a recovery in time for a general election due by June, and suggest Bank of England officials may need to extend their bond-purchase program on Nov. 5. Chancellor of the Exchequer Alistair Darling said today he stands by his forecast that the economy will start growing this year.

More… ^[5]

Jim,

A big signal of global geopolitical realignment is going on and the USA is declining as a superpower.

Regards,
CIGA Christopher

U.S. pressures Japan on military package
Washington concerned as new leaders in Tokyo look to redefine alliance
Thursday, October 22, 2009

Worried about a new direction in Japan’s foreign policy, the Obama administration warned the Tokyo government Wednesday of serious consequences if it reneges on a military realignment plan formulated to deal with a rising China.

The comments from Defense Secretary Robert M. Gates underscored increasing concern among U.S. officials as Japan moves to redefine its alliance with the United States and its place in Asia. In August, the opposition Democratic Party of Japan (DPJ) won an overwhelming victory in elections, ending more than 50 years of one-party rule.

For a U.S. administration burdened with challenges in Pakistan, Afghanistan, Iraq, Iran, North Korea and China, troubles with its closest ally in Asia constitute a new complication.

A senior State Department official said the United States had "grown comfortable" thinking about Japan as a constant in U.S. relations in Asia. It no longer is, he said, adding that "the hardest thing right now is not China, it’s Japan."

The official, who spoke on the condition of anonymity because of the sensitivity of the issue, said the new ruling party lacks experience in government and came to power wanting politicians to be in charge, not the bureaucrats who traditionally ran the country from behind the scenes. Added to that is a deep malaise in a society that has been politically and economically adrift for two decades.

More… ^[6]