China's inflation problem

What a nice problem to have - inflation. Easily fixed with a little appreciation of the yuan but China's not going to give in the US and let the Yuan appreciated. This negates the efforts of the US with their QE2 and low interest rates.

now understanding what is driving the inflation is key - strong economic growth, expanding middle class, strong consumer demand. Even if China hikes interest rates by 1%, the growth momentum will continue.

All the calls I wrote last month will basically expire worthless - exactly what I wanted as I managed to collect quite a bit of premiums. I will do the following monday after they expire - write covered calls (on my longs) and uncovered puts (on stocks that were beaten down this week -metals, resource).

I am still bullish in the short term, and still confident of a global recovery albeit a rocky one. Still waiting to see if the masses start talking about stocks again and optimism return - that's when I sell.