[artbyjody]

I have start6ed drinking so maybe I make sense or not. Cam - good post...and it bears to light some casual observations I have from a business and regular consumer basis.

1. When my associated costs go up, the prices I charge reflect that cost increase; however, they never go down when one or more of those costs go down. The latter - rarely happens unless dissatisfied with a supplier on a service level, or profitability is adversely effected by another competitor that can on a long term basis - provide the same at a lower cost. If not satisfied with a supplier then negotiate the heck and get a better price point, but it doesn't mean I lower my costs. How does this apply with the CPI? Simple actually - this is a practice that a majority of businesses do. For example oil and gas, look at the cost curve and you will see while a few cents may deducted - once certain consumer prices are established for a long period of time... they stay there. Expect to see $1.25 gal gas even if the price of oil goes below $40 a barrel (thats laughable there) - no, just will not happen....

2. Taxes - when consumables required by the masses have price points that continuously increase - taxes do as well. It is called the government getting a piece of the pie because it is a revenue source. Gas at $3.00 a gallon - add a new 2% tax hike because they make money off the inability of the CPI to go below previous levels - and even in cases it does, it means just more volume so the sneak attack and subtle increases...

3. Subsidies and alternatives that should influence the CPI in general - particularly when in regards to fuel. This country has reeked of farmer aide in terms of subsidies of wheat, soybean, and other farmers that can produce that could go to bio diesel. Why isn't bio-diesel a main stream deal - farmers have the ability but , the open market, ah, you either get the consumable price or you get the we are buying it for scrap price... Because bio is niche - bio sells for more than diesel anyways... so where is the incentive?

The same goes with milk / dairy, and the likes... even if what I consider the core of the justification of rising prices as fuel costs, even when they go down - the rest of the industries will keep the pricing as everyone else is adjusted to it... The market is actually not that competitive...

Just some random thoughts (I tried to keep it limited)....more beer