Lego, Wal-Mart and the Economy
Toymaker, Lego and Wal-Mart’s Canadian division experienced a disagreement on pricing that led to a discontinuation of business between the two companies. Retail prices in Canada have fallen* due to an appreciating Canadian dollar (Relative to the plummeting US dollar). A drop in retail prices, requires stores like Wal-Mart to request lower wholesale prices from suppliers like Lego. Lego, based in the US which is experiencing a declining dollar due to inflation, is finding it more difficult to compete in Canada’s market, and was unable to lower their wholesale prices.
This is a relatively insignificant example, but I’m afraid it’s a reminder of our current crisis and a sign of what’s to come. The disastrous policy of inflating the money supply and spending far beyond our means, has many more far reaching consequences than higher domestic prices.
*Although, for whatever twisted reason the Canadian government feels it’s necessary to control retail prices of toys (and most everything else), prices would have come down naturally in a free society as well. As the purchasing power of a currency rises, competition alone would drive prices down.