September 22, 2009

So The Economy is “Recovering”
-- But What About The Coming Inflation?
Many economic pundits tell us the recession has ended and that growth should resume in the 3rd quarter. Hopefully that’s true for the economy and for you specifically. But with all the “stimulus” and money being injected into the world economies, it’s probably a good idea to keep our seat belts fastened for the next jolt: inflation.

And worse than inflation, “stagflation”, a phenomenon not seen since the late ‘70’s and early ‘80’s where there is sluggish growth combined with moderate to high inflation (6% or more on an annualized basis).

The problem with inflation is the “inflation psychology”, where you feel compelled to buy now before the price increases. Once started, this inflationary spiral or psychology actually fuels more and higher inflation. What do you do to protect yourself? You try to buy smarter. Buy only what you need, when you need it. Reward those vendors that keep prices down or help you become more productive.

At CSS Music / D.A.W.N. Music, we’re pleased that we have not raised prices on downloads since we began offering them in 1997. Even with 40% inflation over the last 12 years, we’ve been able to hold prices down by being more efficient AND more importantly because you, our customers, continued to buy in greater numbers each quarter. In this last recession, however, like a majority of businesses, we’ve seen our volume flatten and decline. Costs, unfortunately, have continued to rise, prompting some who advise us to recommend finally raising prices. This in our opinion is not the best course for the future. You need great music at stable predictable prices -- and we need your support to keep prices down. Sounds like a good partnership.

Thanks for being our valued customer!