The frustrating rise in prices and loss of inventory, blamed on the supply chain is probably more of a problem with conceptual embedded ways of doing business. Here are some facts you need to know about inflation, and the absolutely avoidable economic fallout of the pandemic.
In 1994 Microsoft made over a billion dollars. Bill Gates was named the youngest billionaire ever. The following year Microsoft lost 400 million dollars when the tech bubble burst. Remember this – Bill Gates said.
“I made 1 billion dollars in 1994. In 1995 I made 500 million. I did not lose any money, I gained 500 million dollars.”
Realty can be quite eye-opening sometimes. The companies who said they lost money in 2020 did not lose anything, no money was lost, even the airlines made money. United Health Care and AARP made more than 15 billion dollars in 2019 respectively. In 2020, they both made about 3 billion apiece. There was no loss involved here. Companies trying to recoup losses that didn’t occur are causing most of the inflation.
ISP’s charge installation and one-month subscription payment in advance. You get to pay this at the time of installation, within two weeks. Remember that two week billing period it will be important later.
Chater, Verizon, T-Mobile, and most all Insurance companies, bill the first month within two weeks, this then must be paid within a two-week period, which pays for the first month of service. This is not true, the billing period is actually one month previous because you are paying for the previous month’s service. You received no service before installation, therefore you have paid for one month in advance.
The two-week billing period comes into play now. If you are late, your bill comes in two weeks sooner, than the previous month, with a due date within two weeks. We tend to focus on the fee, rather than the bill date. But the bill date is important. Remember you are paying the previous month, ahead one month, but being told its for the previous month.
If you take away two weeks, from the billing cycle, you end up with an extra 28 days in the billing cycle. Two weeks, out from the due date of the previous bill which is one month of no service, is billed in two weeks and called a late bill.
When you cancel service, you are billed out for the month you are in, which was paid already in the last payment you made. So you are paying an extra month.
Inflation works the same way. If I say I increased prices to make up for a lack of inventory, that doesn’t actually exist, I can say prices are inflated against the economy.
Small businesses closed by the thousands, while large businesses made more money in 2020 than they had in 2019.
Here is the problem, as it lays out in reality. There are only a few companies, like two, that manufacture toilet paper. That is two large companies who control whether or not you can wipe. Sounds scary, right? Well, what if they are providing TP to 328 million people, from just two or four large distribution facilities. Of course, during a pandemic, there just won’t be the ability to meet demand, so they have to provide paper in shifts, two weeks for consumers, two weeks for businesses. It’s actually more like two months, but the idea is sound. Of course not.
The sound business model would be every state providing TP to its population, from plants spread out over each state according to need. Not two big manufacturers for the entire country not providing anything when there is a crisis, and there will be crises.
So I inflate prices, while I can only ration supply. That’s inflation.
Dig in here, and let me know your thoughts.