Wednesday, November 07, 2007

Price Increases, Inflation.

Just got another email this morning from a raw materials supplier: "Prices are going up". What is going on? Well, cast your first glance at the US Federal Reserve and their policy of interest rate cuts at the drop of a hat.

What? you ask?

Interest rate cuts, and focus on a Wall Street bailout policy, the policy that the FED is currently embracing, is killing the value of the US dollar against nearly every single currency on the face of the planet. Just last night China said it was looking at diversifying it humongous currency reserves out of mainly US dollars, and into other currencies.

Oil, a commodity we all use in our lives is at record highs per barrel. Gold, a true store of value is hitting new multi-decade highs. The CRB commodity index composed of a variety of commodities we all use, is hitting record highs.

All of this feeds into higher prices for the US consumer. Inflation is here and growing, thanks to cost of raw materials going up up up.

The more the FED debases our currency by cutting interest rates, the worse it is going to get.

Bottom line? If you are in the US, expect even more inflation in goods and services. Higher prices.

Bottom line for Relentless Improvement customers? If you are buying from us in a currency other than the US Dollar, our products are on sale, and cheaper than they have ever been! If you are spending dollars though, sorry, blame the Federal Reserve and Treasury Department under Hank Paulson, we have had to adjust some prices and more adjustments are in the pipeline and on the way.

If your finances allow you to stock up, this is the time. Right now, it is looking like prices adjustments will be increasing in amount and frequency.

Know this as well: We will not compromise our core business philosophy of assured quality, fast shipping and responsive customer service. I am a firm believer in the old aphorism:

"The bitterness of poor quality remains long after the sweetness of low price has been forgotten."

In these inflationary times, you must question competitors pricing that seems too good to be true- what are they leaving out, not doing, that allows a low price? There is no free lunch, and plenty of businesses are willing to sacrifice quality for profit.

Pete