Friday, October 26, 2012

Chinese Rare Earths Producer Suspends Output

This is simply inevitable. China has been producing rare earths at unsustainable and artificially low prices, which is why the rest of the world no longer needed to bother with mining and consuming their own finite resources.

Everyone needs to grasp that this is an inevitability - the prices of various products (mainly higher technology) will have to go up, and thus the global markets and product will rebalance themselves. The manipulation was already done in keeping the prices too low, not in making them go up. Your complaints are coming way too late in this game - you should have been complaining at least a decade ago when they flooded the market with cheap resources, not now that the bubble has burst.

Say a new hot dog stand opens up in town, and for the first month they sell hotdogs for 25 cents at a massive and unsustainable loss. Maybe that's long enough to run the other hot dog stands out of business, or at least make them realize it's just not worth bothering with. Then after the introductory price they go up to where the market belongs. Now at that point the other hot dog stands can re-open, with new owners or with their old owners - doesn't really matter. At the end of the day it's all the same end result - hotdogs cost what they're worth.

My question is this - was it wrong for the rest of us to enjoy hotdogs for only a quarter apiece while we were able to? My opinion is no, that's not wrong of us, nor is it wrong that the world enjoyed lower priced rare earths (and thus technology) because of China's willing sacrifice of their finite resources.

Source: http://rss.slashdot.org/~r/Slashdot/slashdotScience/~3/bgeUkD_CpBQ/chinese-rare-earths-producer-suspends-output

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