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To: Spekulatius who wrote (2464)7/8/2000 1:45:16 PM
From: Joan Osland Graffius  Read Replies (1) of 436258
 
Spekultius, >>power to mark up their prices.

IMO, there are different price mechanisms for increasing prices. At the commodity level the supply needs to be decreased, like PD is doing by shutting down mines. The goods produced by companies in the processing chain to bring us our products have a lag in price increases.Some companies have fixed price contracts, but a lot of these contain clauses that include the prices that are out of control of the producer. We are seeing gas surcharges being added to transportation costs and this is an immediate way to cover costs. They are not adding to the base price but they are getting their costs covered in other ways.

I personally think companies have pricing power and we will see a jump in prices starting in this current quarter. They may generate the revenue in creative ways to cover the increased costs, but none of these companies are in business to loose money, except maybe the internuts. <g>

With a slow down in the economy we will see production cuts and those purchases that can be delayed will be, unless we initially get a hoarding mentality with those folks that have the funds to purchase things they believe will increase in price over a time vs the cost of money.

I agree with you that things will get ugly no matter which way the world turns.

Joan
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