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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (8443)	2/22/2004 7:53:29 PM
From: Silver Super Bull	Read Replies (2) \| Respond to of 110194

Mish, RE: "In theory prices on finished goods should be headed up, in practice there has been little evidence of it." I think we will start to see a lot more of it. As I have posted previously, who in the supply chain is going to "eat" the price increases in raw materials?? It can't be the distributors or retailers - they can't afford it given their margins. It can't be the commodity producers. So that basically leaves the manufacturers or the final consumer as the one who will bear the increase. I don't think the manufacturers, as a group, have the desire or financial cushion to eat the price increases, and some of the articles Russ has posted indicate they are passing on the price increases to consumers. As far as whether there has been any finished goods inflation already, I think that is really up for debate. One excellent point Russ brought up a while back is that in some cases prices might not be going up - but quality is going down. I think that is fairly prevalent now. For example, you can get a car for $15,000-$20,000...but if you want a car that would be considered somewhat impressive plan on spending high 20s to mid 30s minimum. This type of thing is prevalent among many market segments...where there is cheap stuff available but for quality goods you have to really pay up. Not to mention some inflationary services price explosions in insurance, medical, education and a few other areas. DB