These rate hikes came amid increasing pressure on the Chinese government to control inflation.
Instead of seeking to control inflation indirectly, central banks aim expressly at price stability.
But Mr Davies does not think higher taxes are the way to control inflation.
Current measures to control inflation are too mild and thus may actually fan the fires of inflation.
The problem is that Beijing, to control inflation, is in fact putting the brakes on the money supply.
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"The main reason to do this is to control inflation, " said Vitalik Buterin, a journalist at Bitcoin Magazine.
Even with the best intentions, mistakes can be made remember the Tory failure to control inflation in the late 1980s.
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The experiment in "monetarism" - using the control of the money supply to control inflation - was quite quickly abandoned.
The government of China has been tightening its monetary policy to cool real estate prices within a larger objective to control inflation.
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Investors are betting that the news means the Federal Reserve could be less likely to push up interest rates rapidly to control inflation.
Second, I sincerely doubt that Bernanke will be able to keep his promise to control inflation quickly once he finally admits it has arrived.
Before that there were 13 rate increases between March 2010 and October 2011 to control inflation which touched a double-digit level in September 2011.
Borrowing costs have surged as the central bank raised its policy lending rate 13 times between early 2010 and late 2011 to control inflation.
She was pursuing a "sensible" approach to control inflation so that the economy could recover and unemployment would fall in the longer term, he argues.
Despite these efforts, the Chinese have yet to control inflation completely.
The move by the commodity-consuming juggernaut China was not a big surprise, as its monetary officials are working to control inflation by curtailing domestic consumption.
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When the government recognizes that all its efforts to control inflation are too tepid and thus futile, it will eventually institute price and wage controls.
Less reliance on interest rates and currency appreciation to control inflation.
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"Governments are deregulating to control inflation and avoid favoritism, " he adds.
In claiming he is 100% confident in his ability to control inflation, Mr. Bernanke ignores the record that during his tenure he has misdiagnosed the economy.
Instead, the government was trying to control inflation through unorthodox measures, such as limiting the price of petrol or slashing electricity tariffs and taxes on car sales.
The bigger issue for copper will be future consumption, particularly as the government continues to try to tame the economy in an effort to control inflation, Gross said.
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That is one reason why academics and policy makers thought central bank efforts to cut inflation would stimulate growth, and a failure to control inflation would always hurt it.
While some of its neighbours have been raising interest rates to control inflation and keep pace with the Fed, Indonesia is in easing mode, aiming to boost economic growth.
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And there is scant agreement on how best to achieve these goals in health care (whereas, with the bank, there is no doubt that interest rates can be used to control inflation).
This decline has been primarily due to lower sales in China where efforts of the Chinese government to control inflation by maintaining high interest rates has impacted growth in the high-end construction market.
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The slowdown in growth is the result of high interest rates, which have been maintained in order to control inflation which exceeded 6% in July last year, well above the government targeted 4%.
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The efforts by the Chinese government to control inflation, which remained above the government mandated 4% for the most part of 2011 and early 2012, hurt the construction sector of the country by dampening investment.
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Inflation was believed to be driven largely by non-monetary factors, and most people believed that if you tried to control inflation using monetary policy, the primary effect would be to throw a lot of people out of work.
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