Chinese Raise Benchmark Deposit and Lending Rate

I think I may have said this would happen a dozen times in the last week sometime in February. Inflation surges and they do what they have to do, again this is why I'm not a fan of the emerging markets trade. In any case, this was an unscheduled surprise hike of 25 basis points to each-the deposit and lending rate. In essence the Chinese are removing liquidity from the system-the same liquidity that we are opening the flood gates to here in the US.

As manipulated as Chinese data is, they at least recognize inflation and are sopping up excess speculative money to try to curb it, while we create it in such quantity, it is now one of our leading exports.

My next prediction on China is that they will do this every month for at least the next two months.