Friday, September 17, 2010

Any ideas on the effect on inflation in the UK from this?

China Is Set to Lose 2% of GDP Cleaning Up Decades of Pollution

Fujian-based Zijin Mining Group Co., China’s largest gold producer, was forced to shut a copper plant and limit production at a gold mine in eastern China’s Fujian province after acid- laced waste spilled into a local river, killing enough fish to feed 72,000 people for a year.

Posted by mark @ 10:38 AM (836 views)
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6 thoughts on “Any ideas on the effect on inflation in the UK from this?

  • “Any ideas on the effect on inflation in the UK from this?”

    Can’t see any effect here on the sterling money supply, so the answer would be no effect at all on UK inflation.

    As a side point, I do like the way the article is focused on the impact of pollution on humans, unlike the West where the environmental movement is preoccupied with the impact on trees, puddles, mosquitos, etc, as if these things have some mysterious intrinsic value in and of themselves. The Chinese are far more hard-headed and practical. Just another thing to like about them.

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  • So cleaning up industries won’t increase prices of chinese made goods?

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  • Possibly, but that’s not inflation. That is simply movements in supply and demand which should never be confused with inflation, which is a loss in purchasing power due to an increase in the money supply.

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  • 3. capitalist

    SO THERE’S NO SUCH THING AS ‘FOOD’ PRICE INFLATION. Think on!

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  • There are food price rises but there is no such thing as food price inflation, although there could be food price rises due to inflation.

    I wouldn’t normally labour what appears to be a mere semantic point but there is widespread confusion on this issue, to the point where people frequently talk about using monetary policy tools in response to price changes caused by changes in supply and demand conditions, such as a season of bad crops or a curb in oil supplies. It’s an error which stems from a misunderstanding of what inflation actually is.

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  • There are food price rises but there is no such thing as food price inflation, although there could be food price rises due to inflation.

    I wouldn’t normally labour what appears to be a semantic point, but the meaning of inflation is widely misunderstood, to the point where people frequently (and wrongly) advocate the use of monetary policy tools in response to real world changes in supply in demand, such as a change in supply conditions for oil or crops.

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