` THE RALLY `
Wednesday, July 16, 2008
Read this recently.....
A man eats two eggs each morning for breakfast. When he goes to the
> grocery store he pays 60 cents a dozen. Since a dozen eggs won't last
> a week he normally buys two dozens at a time. One day while buying
> eggs he notices that the price has risen to 72 cents. The next time he
> buys groceries, eggs are 76 cents a dozen.
>
> When asked to explain the price of eggs the store owner says, 'The
> price has gone up and I have to raise my price accordingly'. This
> store buys 100 dozen eggs a day. He checked around for a better price
> and all the distributors have raised their prices. The distributors
> have begun to buy from the huge egg farms. The small egg farms have
> been driven out of business. The huge egg farms sell 100,000 dozen
> eggs a day to distributors.
> With no competition, they can set the price as they see fit. The
> distributors then have to raise their prices to the grocery stores.
> And on and on and on.
>
> As the man kept buying eggs the price kept going up. He saw the big
> egg trucks delivering 100 dozen eggs each day. Nothing changed there.
> He checked out the huge egg farms and found they were selling 100,000
> dozen eggs to the distributors daily. Nothing had changed but the price of eggs.
>
> Then week before Thanksgiving the price of eggs shot up to $1.00 a dozen.
> Again he asked the grocery owner why and was told, 'Cakes and baking
> for the holiday'. The huge egg farmers know there will be a lot of
> baking going on and more eggs will be used. Hence, the price of eggs
> goes up. Expect the same thing at Christmas and other times when
> family cooking, baking happen.
>
> This pattern continues until the price of eggs is 2.00 a dozen. The
> man says, ' There must be something we can do about the price of
> eggs'. He starts talking to all the people in his town and they decide
> to stop buying eggs. This didn't work because everyone needed eggs.
>
> Finally, the man suggested only buying what you need. He ate 2 eggs a day.
> On the way home from work he would stop at the grocery and buy two eggs.
> Everyone in town started buying 2 or 3 eggs a day.
>
> The grocery store owner began complaining that he had too many eggs in
> his cooler. He told the distributor that he didn't need any eggs.
> Maybe wouldn't need any all week. The distributor had eggs piling up
> at his warehouse. He told the huge egg farms that he didn't have any
> room for eggs would not need any for at least two weeks.
>
> At the egg farm, the chickens just kept on laying eggs. To relieve the
> pressure, the huge egg farm told the distributor that they could buy
> the eggs at a lower price. The distributor said, ' I don't have the
> room for the eggs even if they were free'.
>
> The distributor told the grocery store owner that he would lower the
> price of the eggs if the store would start buying again. The grocery
> store owner said, 'I don't have room for more eggs. The customers are
> only buying 2 or
> 3 eggs at a time. Now if you were to drop the price of eggs back down
> to the original price, the customers would start buying by the dozen again'.
>
> The distributors sent that proposal to the huge egg farmers but the
> egg farmers liked the price they were getting for their eggs but,
> those chickens just kept on laying. Finally, the egg farmers lowered
> the price of their eggs. But only a few cents. The customers still
> bought 2 or 3 eggs at a time. They said, 'when the price of eggs gets
> down to where it was before, we will start buying by the dozen.'
>
> Slowly the price of eggs started dropping. The distributors had to
> slash their prices to make room for the eggs coming from the egg
> farmers. The egg farmers cut their prices because the distributors
> wouldn't buy at a higher price than they were selling eggs for.
> Anyway, they had full warehouses and wouldn't need eggs for quite a
> while. And those chickens kept on laying.
> Eventually, the egg farmers cut their prices because they were
> throwing away eggs they couldn't sell.
>
> The distributors started buying again because the eggs were priced to
> where the stores could afford to sell them at the lower price. And the
> customers starting buying by the dozen again.
>
> Now, transpose this analogy to the gasoline industry. What if everyone
> only bought $10.00 worth of gas each time they pulled to the pump? The
> dealer's tanks would stay semi full all the time. The dealers wouldn't
> have room for the gas coming from the huge tank farms. The tank farms
> wouldn't have room for the gas coming from the refining plants. And
> the refining plants wouldn't have room for the oil being off loaded
> from the huge tankers coming from the oil fiends.
>
> Just $10.00 each time you buy gas. Don't fill it up. You may have to
> stop for gas twice a week but, the price should come down. Think about it.
>
> As an added note...When I buy $10.00 worth of gas that leaves my tank
> a little under quarter full. The way prices are jumping around, you
> can buy gas for $2.65 a gallon and then the next morning it can be
> $2.15. If you have your tank full of $2.65 gas you don't have room for the $2.15 gas.
>
> You might not understand the economics of only buying two eggs at a
> time but, you can't buy cheaper gas if your tank is full of the high
> priced stuff. Also, don't buy anything else at the gas station; don't
> give the many more of your hard earned money than what you spend on
> gas, until the prices comedown.' Just think of this concept for a while.
brakes applied at |7/16/2008 11:07:00 PM|
