You've outlined some valid points however, no need for panic stations just yet after all, "this time it isn't different". I think long term you're right about inflation, how else are the U.S going to pay back the Chinese, but I don't think the Chinese really want to dump their U.S reserves just yet. Do you know how much $U.S. they really hold?
As for the current global economy, it still is very bad and i can only see high unemployment continuing in the U.S resulting in a deflationary environment where U.S GDP still dwarfs Chinese GDP.
It's definately a tricky time for central banks; don't raise rates and you could have an inflationary problems down the track. Do raise rates rates and things could get way worse, time will tell.
