Beijing will persevere with its tight monetary policy this year, relying on currency, interest rate and money supply measures, Yi Gang, the vice governor of the People's Bank of China (PBOC) said at an economic forum on Sunday.

Interest rates went up six times in 2007, pushing the one-year lending rate to 7.47%, while the yuan gained 7% on the US dollar, twice as much as in 2006. Goldman Sachs expects a 12% gain against the dollar this year.
Bloomberg

I am hopeful Goldman Sachs is right!  That would be nice for my bank account!!  Seriously though, just since I have returned, the PBOC has focused on the exchange rate as a tool rather than internal monetary policy.  Since I am going to teach Principles of Macroeconomics (out of Mankiw's 3rd Edition - YEAH!), I am trying to give a few thoughts to the students as we discuss Options versus Futures choices.  Since interest rates will cause bond prices to fluctuate, my question was what causes interest rates to change:

    In China - interest rates are rising ... Why?  Inflation of 7.1%
    In America - interest rates are falling .... Why?  Slower growth and the threat of recession!!! 

Macroeconomics!  So nice that the economies give me such great examples!

OH - the Temp:  43.5 degrees at 8:35 CST (China Standard Time) - that's 6.4 Celsius.  With Light Rain/Mist (was pouring just a little while ago as I walked back from the Century Mart grocery store).

AND - it is nice to see Alta receive another 15" fresh - pushing the ski area over the 500" average already with two months of scheduled skiing left to go!  (508" if you're counting, with a 150" base)....