Worrying signs are emerging from China with reports that we are seeing the creation of an asset price bubble in that market. There was 4.57 trillion yuan (or about $US670 billion) of new lending pouring into the market but most of that was on speculative assets, not the real economy.

Fitch Ratings now warns that the Chinese banks are an accident waiting to happen. And it will affect all of us.

Fitch warns: "With much of the world immersed in crisis, China appears to be one of the few countries where the financial system continues to function largely without a glitch, but Fitch is growing increasingly wary. Future losses on stimulus could turn out to be larger than expected, and it is unclear what share the central and/or local governments ultimately will be willing or able to bear."

If that's right, China's commodity speculators are just using cheap money to speculate and the spring recovery will be exposed as an inventory spike. That would be followed a big downturn into next year as the stimulus wears off.

The implications for the global economy are massive. Watch this space.