Tuesday, January 22, 2008
This following article is regarding global inflation, which obviously has links to economics. Below is adapted from the article (titled Global Inflation: A delicate condition) taken from an expensive magazine (this week's issue) called The Economist:
Having a little bit of inflation is like being a little bit pregnant. ... (in USA) figures released on January 16th showed that consumer prices were 4.1% higher in December than a year earlier, up from 2.5% in 2006. ... China's inflation rate, at 6.9%, is the highest in 11 years. ... global inflation was 4.8% in the year to November, 2 percentage points up from the previous year. Prices accelerated in 80% of the countries (tracked).
... The downward price pressure from cheap Chinese goods may be abating while the developing world's rampant demand for resources may continually drive commodity prices higher. ... (in China) the inflation rate has tripled in the past year. But that rise is almost entirely due to a jump in food prices, particularly of pork. ...
The article is really much longer than this, but I took out some main points. Basically, there has been a fast inflation rate across the globe, for many reasons: from the increasing demands of commodities like the above mentioned pork (due to pig disease), the scarcity of resources like oil (the price of oil has risen almost 80% over the past year), and also the structural changes in growing economies such as China and India.
The main point here is based on demand and supply. Where there is a higher demand of a commodity with low supply (say pork), the prices of it will obviously increase due to the unlimited consumption of limited pork supply. It works the same for oil.
Done by Matthew. (:
6:20 PM
