Tuesday, June 24, 2008

More on inflation

As a followup on my previous comments about inflation, consider Dow Chemical's announcement today that it will raise prices by up to 25% next month, following on a 20% price increase last month. For those whose math skills are shaky, that's 50% in three months (don't forget to compound!), which comes to 400% annually! Consumers won't see these price increases immediately, but rest assured that this will eventually work its way through the supply chain; manufacturers are not going to just absorb this price increase.

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