Wednesday, May 07, 2008

Gas prices and WalMart

Yes, I'm late. Staff meetings and birthday lunches and whatnot

You know why the price of gas is so high? It's because you shop at Walmart.

reason 1:
Walmart is such a monster of a company that they basically own all their suppliers. Walmart is such a huge part of their sales that they have to do what Walmart tells them or give up >50% of their sales. Walmart tells their suppliers to drop their prices and drop their prices until the company has to say "but we've cut everything that can be cut. We can't go any lower." Then Walmart tells them to move production to China. True. The company doesn't (usually) say "well we'll have to move production offshore". Walmart tells them to go to China or they'll switch suppliers. Without Walmart they're out of business.

So Walmart is cheap and everybody shops there. All our money goes to China. American manufacturing fails. The government borrows money from China. We sent that money to China. We borrow more. Eventually the dollar collapses and can't buy what it once could. So the price of gas goes up.

reason 2:
China's economy takes off because they're selling stuff to America. More and more Chinese can afford cars instead of bikes. Industry gears up and needs to run their factories. They need the oil almost as much as we do. So we get into a bidding war and the price goes up.

I like high gas prices. I don't drive. It forces better choices from those who do. Including this one. If you want cheaper gas and a better economy stop sending your money to China by shopping at Walmart.

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