WHAT'S GOING ON WITH PRICING???

 I can no longer stand to absorb the huge fall in the value of the US dollar. Many of you have no comprehension of what is happening. Regardless of your political stand, one can not ignore the fact that for over 6 years, the US has become a heavy debtor country. We are spending well in excess of tax revenues, and borrowing heavily to pay for what will be trillions of dollars of expensive overseas operations. This makes the value of our money worth less to those in other countries.

Now some facts: If you went to Canada in January of 2003 (only five years ago) and bought something that cost  you $10, that same item would cost you $15.40 on March 24 of 2008. That ignores any inflation or price increases in that item in Canadian money. So, it costs you 54% more in the money of the US. The USD used to be worth quite a bit more than the CDN dollar. Now, it is worth less! Not long ago, the Australian dollar was worth half the USD. Today they are about the same. That means our money is worth half of what it was. How about another example? I import heavily from Europe. Something that cost me $10 in US currency in May of 2002, now costs me $17.50. That means my cost in USD (ignoring inflation, cost of living or any other adjustments) has gone up 75% in less than 6 years. Some of this has been reflected in a slow growth in prices. But, it has not nearly covered it.

I have not passed on these increases to my customers, hoping  that the trend would reverse itself. It is now  two years past the point where I can no longer do this.

A price adjustment has been made effective 3/28/03. If there is not an improvement in the USD exchange rate soon, a second, but hopefully smaller, increase will be made later this year.*

It is important that you fully understand that this is not inflation, it is not depression, it is not recession, it is not failing mortgages, it is not the price of fuel, it is not cost of living, it is not wage increases, it is not  the stock market, it is not profit increases. My factory cost is about the same, but I have to pay in U.S. dollars that are increasingly worth less and less. For example, between August of last year and the end of April 08, my payments are worth 23% less. This huge drop is over only an 8 month period! So, a $40 timer, becomes almost a $50 one.

I would much prefer things to be the way they were in many ways but that is not what has happened. Be sure to vote this year. And, as they say in Chicago, vote often! Our current government has totally destroyed our economy.

*The dollar sank to an all-time low against the euro Wednesday with U.S. inflation coming in three times as high as expected in March, on top of escalating food and energy prices. (CNN 4/16/08)

The dollar hit a new all-time low Thursday, its second record in as many days, (CNN 4/17/08)

Image courtesy of CNN