Jung An Credit Co provides funds to small businesses both around its Shenzhen headquarters and elsewhere in China - but only when it can receive money from the Chinese banks since it itself doesn't have deposits to recycle. In recent months, it has had to turn away as many as half its potential borrowers for lack of funds.

Meanwhile, 1,300 kilometres and a world away, in Shanghai, International Far Eastern Leasing, one of the biggest non-banks in China, has commitments from banks that amount to twice its balance sheet and has no problem helping its customers finance purchases of everything from MRI scanning machines to printing presses.

China has been veering away from the easy money policies that it embraced in the wake of the global financial crisis for months. With inflation more than 5 per cent, especially for politically sensitive foodstuffs and property, dealing with rising prices has become top priority in Beijing.

So far, the effects have been uneven as the varying circumstances of Jung An and Far Eastern suggest.

Meanwhile, parsing lending data and other indicators of monetary policy has become a global pastime. The extent to which China will embrace tightening in earnest today has consequences that resonate far beyond China itself, influencing growth and the price of commodities everywhere.

If lending growth continues at a rapid pace, it could reinforce fears of overheating, wasteful investment and a new round of non-performing loans. But if growth slows down too sharply, all over the world prices for everything from gold to pork could drop and factories and ports fall silent as orders from previously voracious customers in China fall.

Banking regulators have recently said that they won't adopt explicit lending targets for the year. The central bank, the People's Bank of China, has already raised interest rates twice recently and hiked the amount of money Chinese banks have to leave on deposit with it six times in 2010. But real interest rates remain negative.

David Fuller's view With markets, monetary policy trumps most other factors most of the time, as we often say at Fullermoney. The trend of global monetary policy has been slowly moving from super-accommodative in 4Q 2008 and most of 2009, towards a neutral position over the last year.

However, the tectonic plates of global monetary policy are not shifting simultaneously. The incremental move to a less accommodative stance is predictably coming from Asian-led emerging (progressing) economies and the leading exporters of natural resources. They have been the first to feel the fire of inflation at their feet.

The most accommodative monetary policy is still evident in the USA, in the form of QE2 from Mr Bernanke. Also, last month's bipartisan agreement - to extend both the Bush tax cuts for the wealthy, plus a 13-month extension of welfare benefits for the long-term unemployed - added another significant fiscal stimulus.

Continued GDP growth in the stronger economies and more gradual recoveries in the West and Japan, which seems likely, will result not only in less accommodative monetary policy but an eventual tightening bias.

So should we begin to cash up and head for the hills?

Those invested in Fullermoney secular themes would certainly book some handsome profits. That is always a temptation when there are some signs of market froth. While most subscribers are more than qualified to make up their own minds, I am willing to endure some turbulence in my personal portfolio, not least because real interest rates remain mostly negative, even in China as Henny Sender points out in the article above.

Subscribers looking to invest in Fullermoney themes may recall that the best buying opportunities in cyclical bull trends occur following mean reversion reactions towards the rising 200-day moving averages.

Fullermoney has been growing more concerned about commodity price inflation, as you know. So have some other investors (see Eoin's item on India below) leading to some setbacks. However this week's reactions in a number of commodities, which started with precious metals, have blown some of the recent froth off this secular bull market in resources.

This is most likely only a short to medium-term pause in overall upward trends for commodities but if it persists for a few weeks, let alone longer, concern over inflation will probably wane for a while. Among stock markets we currently have a positive Wall Street leash effect and while a number of indices are temporarily overextended, they remain in cyclical bull market territory, to the left of their medium-term uptrends represented by the rising 200-day moving averages.

Meanwhile, we are approaching a 'new normal' in which people will re-write an old adage and say: When China sneezes, the world catches a cold.