If you had any doubt that China was the canary in the coal mine forthe global financial markets, a theory that I have been espousing forsome months now, today’s action delivered the irrefutable proof. Twoback to back interest rate rises for the Yuan, and a snugging of bankreserve requirements by the People’s Bank of China to fight inflationwas all it took to knock 9% off of the Middle Kingdom’s ETF (NYSEARCA:FXI) inseven days. That is the price of allowing the Federal Reserve to setChina’s monetary policy via a fixed Yuan exchange rate (NYSEARCA:CYB). It alsogives some credence to my forecast that all asset classes haveperversely mutated into one giant carry trade, thanks to easy money, asoutlined in my January 4 Annual Asset Allocation Review. When marketsturn, there will be no place to hide, but US dollar cash. That’s whythe S&P 500 dove 20 points, crude shaved $2, the dollar punchedagainst the Euro to $1.40, and gold shrank $30. This is all happeningon a day when the health care and the pharmaceutical industries won theMassachusetts lottery, sending their shares soaring. In case you missedmy opus on my predictions for the year, I’m resending it gratis to allpaid subscribers today. It was derived by going to my local stockyardand obtaining a goat, so I could slaughter it and examine the entrails.No tea leaves for this Rambo.