The Economic Time™ is just fine in China

• Recent market speculation about who China's next leader will be is misplaced: the strongman era is over with!

• China's real challenge, the one that is getting increasing attention, is how to govern the place

• Within this, the key job is to maintain social stability by creating 10 million new jobs a year - that is 10 times more than what is needed by way of job creation in America!

• Thus, recent talk of "tightening" should not be a reason to sell - just as lower US Fed Funds are not a reason to buy the US market.

China's energy policy is evolving rapidly into more self-reliance with greater emphasis on renewable energy - what an investment opportunity! Wen's visit with Putin this Monday and Tuesday will focus very much on the sourcing of energy. It is intriguing to note that while Wen is visiting Putin, US Defense Secretary Gates is visiting Beijing.

• China's energy policy will give rise to new geopolitical tensions where Taiwan and Myanmar are footballs in the game of negotiation.

Commodities are pulling markets up - and banks are coping with sub-prime crises

• We believe that the commodity cycle will remain heading north, courtesy of China and India

• Despite the good commodity outlook (which will keep propelling commodity markets and currencies like Australia and Canada), the far bigger danger is America's sub-prime mess

• It will become evident next year, when markets finally accept that The Economic Time™ in America has been worsening for a good year - and that this is why the Fed has cut Fed Funds yet again.

• Indeed, if people are buying markets mainly because of lower Fed Funds rates: beware!