Sunday, November 30, 2008

inflation part 2...

first let me explain some consequences of inflation..
ok, it all starts from fuel(petrol n diesel)..ya, everybody noes that so i dun need 2 go 2 detail..

When the fuel increase, the big consumers of it for example fisherman, lorry workers, and mainly those that gt 2 do a lot of transportation(transportation provider).
When that happen, they will have 2 pay more money for the fuel for the same amount of things they transport...(refer 2 the post "inflation")..
So, in order to cover up the cost, they increase their price also(which sumtimes they bring up the price too much, please refer to the post "inflation")..

ok, so what happens now is that for those people or company that used their transportation would also hav 2 pay more bt for the same amount of things they want.

So, the company n people who bought from those transportation provider, would also do the same by increasing their product price to their consumers..

All, this goes on and on you see..
This is what we called a "domino effect"..(similar to a domino falling down frm the beginning n so on n on til the end.)

But as for this, at the end of the day, this domino effect will ends up going back to the transportation provider who increase their price in d first place. Reason being? ok, here is it, Since those transportation provider are also human which they also need to eat, drink, place to stay, and therefore they are also consumers of products and services as well.. Hence, they also will consume product and services from other company and places which had also increase their price. In other words, the transportation provider will also feel the effect of the inflation.

ok, understand that?

Now, the fuel price in Malaysia had reduce, But many idiots didn't want to reduce their price also.. They gav a lot of reason like wait and see others first..
Kinda think of it, they are good at giving reasons when it comes 2 increase their price but also good at giving reasons not to reduce their price when the fuel price goes down.

If they start to reduce their price then others also wil hav to as well. This is bcoz when people these days are looking for low cost.. So if the price is cheaper then a lot people wil go there and less people at those place which are expensive.
So, it will force those who increase their price to reduce it.

Anyway, look at the guy who owns AirAsia. I think that he is a pro in managing finance. He is also very gud at taking opportunity like right now when people are increasing their price whereas he isn't. Instead, he further reduces it.

Look forward 2 my next post..., c ya in the next dunno hw many days..

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