With the Chinese yuan continuing to rise as the government tries to slow surging inflation, the question is whether Chinese citizens will take out their frustration at the government during the coming summer Olympics.

The currency rose to the highest since a link to the U.S. dollar ended in July 2005 after the People's Bank of China said in a five-year plan released yesterday that it will "innovate'' to address problems, including growth in money supply. Global commodity prices surged to a record yesterday, as oil jumped above $100 a barrel and copper rallied.

Ah, the infamous "five-year plan." It's been since before the fall of the Soviet Union that we last heard about the five-year plan. Back then, government controls led to shortages of everything from bread and potatoes to vodka, and it sure seems like history is repeating itself. There is no question that the Chinese economy is enjoying incredible growth. We even see an emerging middle class taking shape, eager to spend its new-found disposable income. The problem? Once again, shortages.

No matter how hard they try, governments are lousy at controlling the supply of goods in the marketplace. The market is the only way to truly gauge how much of something is needed and at what price.

The upcoming summer Olympics is supposed to be a feather in the hat of the Chinese model. On the other hand, there is no better platform to protest failed government policies than when the eyes of the entire world are focused on you. If shortages continue and inflation continues to surge, look for an especially hot summer in China.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has no position in any stock mentioned as of 2/20/08.

Director and producer Steven Spielberg resigned his non-paying artistic director advisory role for the 2008 Summer Olympics Games in Beijing because he has become disenchanted with China's lack of effort to use its influence in Sudan to end violence in the Darfur region.

The Chinese want to be players on the world stage without accepting the responsibility that goes along with it, and that was not acceptable to Spielberg. There has been growing pressure around the world on the Chinese, who purchase most of Sudan's oil and sell them weapons, to exert political and economic pressure on the government of Sudan. While Spielberg is only one more voice in a long list condemning Chinese actions and the lack there of, he is a very prominent voice.

Governments, Olympic athletes, religious leaders and shareholders have been complaining that China was not doing enough, if anything to curb the violence. This was an issue with Berkshire Hathaway (NYSE: BRK.A) shareholders at their 2007 annual meeting. While stating that he sold off BRK's interest in PetroChina (NYSE: PTR) based on valuation, Warren Buffett was completely divested in a matter of months and the stock has fallen almost 40% from its highs.

China may be kicking our collective butts regarding our colossal trade deficit, but it is also doing its fair share of spending too. Spending by China has affected commodity prices (metals, concrete), energy prices (oil & gas), construction service prices (design, planning, engineering, management), shipping, housing, clothing, electronics, you name it. The Chinese have been spending with reckless abandon -- all the time buying our treasury notes and expanding their economy at the rapid pace of 8% to 10% GDP annually. Read the Economist for more, China forecast

Growth in China has spurred the U.S. and the global economy. Reading the comments I have received to yesterday's post Venice Beach as economic indicator: Consumer spending slows, there seems to be plenty of negative sentiment out there about the U.S. economy. Making the case for recession is not hard to do. One could simply look at our run-away trade deficit and Federal spending. With a minimum of economic understanding, you could get scared to death.

My "favorite feature" of the U.S. budget (deficit) is the cost of the Iraq war which is an "off-line" item -- meaning they do not count it in their figures. That's hysterical. Let's all just take our mortgages and rents and put them off-line. Then we won't have to worry about them and no one will notice. The Feds should have a "Department of Pretending". EVERYONE WOULD UNDERSTAND THAT PERFECTLY.

I think the Federal branch learned this trick from Wall Street. It's called a "one-time expense" and since it's not a "recurring expense," analysts just set it aside when determining the value of a company. That stinks, but it will have to be the subject of another story. The problem is we have had this one-time expense (Iraq) for several years and we can anticipate several more.

But I have digressed. The main point I wanted to make here is that we can all make the case for a recession. Trade, debt, spending, energy, housing and numerous other areas support the case. Commenter's have raised these issues and see bad times in the next few years.

While I agree that is a possibility, I think that global recession will be postponed at least until the Chinese have their BIG OLYMPIC SHOW in Beijing, regardless of any other factors. I believe the Chinese government has been postponing numerous "pipers they have to pay" because of the upcoming Summer Olympics. This has been a major focus since they won the right to be the host in 2008. Some of their early and rapid economic expansion can be traced to this effort. When it is over they will utter a collective (leftover communist term) sigh of relief. When that happens, spending will slow, interest rates will be allowed to rise and only firms specializing in the clean-up of the environment will be popular.

China has not only been slow to curb its unsustainable growth, but one of the pipers they will have to pay will be for cleaner water, air and city streets and farmland. The first part to any clean-up campaign is to stop doing those things that are causing the problem; which is everything, in this massive national expansion.

I do not see the same doom that many see. But when China takes that HUGE sigh of relief, then we may have a recession.

Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.