One of my bearish theses is that central banks around the world are tightening, a fact that seems to have escaped most American investors and commentators, at least in the stock market.  As I have written, in this era of financial globalization, global monetary conditions matter more than ever to American equity investors.

China raised interest rates.  Again.

China raised interest rates for the third time in 11 months to curb inflation and asset bubbles in the world's fastest-growing major economy.                

The one-year benchmark lending rate will be raised to 6.39 percent from 6.12 percent, starting tomorrow, the Beijing-based People's Bank of China said today on its Web site. The one-year deposit rate will be increased to 2.79 percent from 2.52 percent. A central bank spokesman confirmed the increases.      

Central bank Governor Zhou Xiaochuan is concerned that cash from a record trade surplus is stoking excess investment, raising the risk of accelerating inflation and boom-and-bust cycles in asset prices. Premier Wen Jiabao said yesterday the nation's economic expansion is unstable and environmentally unsustainable.

And this week, Switzerland raised interest rates and stated it wasn't finished.

The Swiss National Bank (SNB) raised its key interest rate on Thursday, as expected, by 25 basis points for the sixth consecutive quarter.

It also warned that to ensure price stability, it would probably have to continue its policy of rate rises.

The bank increased the target range for its benchmark rate, the three-month Swiss franc London Interbank Offered Rate or Libor, to 1.75 – 2.75 per cent, aiming for the midpoint of 2.25 per cent.

In a statement from Zurich, the bank said by raising the target range, it was ensuring that the inflation outlook would remain "favourable".

It said Thursday's decision was a sign the bank was maintaining its monetary policy course of gradual normalisation.

There has been a great deal of press about the yen carry trade.  What has received less attention has been the franc carry trade, particularly the effects on consumers who have funded their mortgages in Swiss francs.