China's running a temp, takes an aspirin

Chinese banking authorities announced another hike in bank reserve requirements Friday in an effort to slow what they believe to be an over heated economy.  They also indicated willingness to raise interest rates to further rein in bank lending. 

The attempt to dampen the economy is driven by rising price inflation and a perceptible real estate bubble.  We’ve previously discussed what appears to be apparently massive malinvestment that has been accumulating during China’s boom.  In order to rein in the bubble the Chinese may finally be moving toward letting their currency appreciate against the dollar.