China has said it will maintain an appropriately loose monetary policy in 2010. Less than two-weeks into the year. What have they done? They’ve raised rates of 3-month t-bills and tighten reserve requirements. Looks very much like they are beginning to take away the punch-bowl, doesn’t it.
While they have vowed to maintain a steady Yuan this year, they could do themselves a world of political good by revaluing the currency, which would have a further tightening impact on the economy. That would be a pleasant surprise for 2010.