Overnight, China raised reserve rates for the third time in the last month.  This is a day before the expected inflation numbers come out showing that inflation is at 4.7% year over year.  The steady raises are happening due to the overheating loan market in China.  The attempts by China to get their banks to recapitalize with western funds (yes China Banks were raising funds for Western investors lately) did work, instead of using the capital to build up their balance sheets, the banks went out and reloaned it all and more.

China is showing all of the classical signs of an overheating, over leverage, over inflated economy.  What happens next will be interesting.