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If It's Not Inflation, Why Are Prices Going Up?

Being a euro-land resident, I have one question for those who argue that the "hard numbers" do not indicate euro-led inflation ("Euro-gouging?," Finance, Sept. 16). Don't many statistical results involve a basket of goods and services including the cost of more major expenses such as housing and automobiles? It is likely that the official statistics weigh such bigger expenses more heavily, and yet we normally do not buy new homes or cars on a daily basis. The anecdotal evidence is probably a more true reflection of what has happened to day-to-day spending. It is certainly giving the euro a black eye.

Howard M. Liebman


In Belgium, prices for milk, yogurt, vegetables, etc. have increased by at least 40% in the past few months. I am not referring to prices as charged by what German Finance Minister Hans Einchel refers to as underhanded merchants; I am referring to prices as charged by international retailers like Carrefour and others for products with international brand names like Danone. An increase of 40% in grocery expenses means an immediate increase of 10% to 20% in your monthly expenses.

Peter Hudson

Brussels The view of Tony Blair as Bush's lapdog is not only a view increasingly held by British voters. The same view is held by the majority of other Europeans as well ("Can Tony Blair bring Britain around on Iraq?" International Outlook, Sept. 16). The expressed view that support for U.S. policy runs deep is nothing more than wishful thinking. Perhaps by throwing his lot in with Bush in a war against Iraq, Blair sees a way of restoring some of Britain's long-faded imperial glory. It will be interesting to see when Americans will open their eyes and start to see U.S. foreign policy for what it is: disastrous for the U.S. and the rest of the world.

Jonathan Anderson

London Democracies are based on principles. Yet at the first sign of political convenience, the U.S.--which only yesterday was spouting the merits of reducing farm subsidies--signs a whopping $182 billion farm bill ("Farm subsidies: A blight on the economy," American News, Sept. 9). That leads one to conclude that there are no principles involved, just conveniences.

As Paul Magnusson's commentary points out, the agriculture-based economies will only be able to spend what they earn from selling, minus the service on their big foreign bank debts--and guess whose banks they are? It makes economic sense--and it will cost less--to cut subsidies, import, and raise development worldwide, thereby increasing the demand for high-cost technological products from developed countries.

The least-developed countries feel that the Uruguay Round sold them down the river, and there is mounting dissatisfaction with the U.S. and growing influence from the Left. Add to that world insecurity and radicalism, and what have we?

Michael Sucharov

Ing?, Brazil I was very amused by Starbucks Corp.'s claim that they will come to Italy one day ("Planet Starbucks," Cover Story, Sept. 9). Automatic espresso machines? Most Italians go to the bar to chat with the cashier or the guy at the coffee machine about the latest actress or football match--hard to do with a machine, even with a Java-enabled one.

And what about allowing customers to order their coffee via the Web? What if the customer meets somebody on the way to the bar? "Happy to see you, but my coffee is ready, I'll send you an e-mail!" Come on. Prepaid cards? They've been around for ages here.

What we want in Italy (and we have it already) is good coffee at a reasonable price, some nice food just in case, all served quickly but also with a human touch. Not one of these things is Starbucks able to deliver now. And they call themselves a "coffee bar"? Brrrr...

Alberto Canesi

Rome Re: "A different yardstick for cable" (The Corporation, Sept. 2, North American Edition): It has always been known that "creative" accounting mainly involves finding ways of inflating sales (e.g., by recognizing revenues where there are none yet) or deflating expenses (e.g., by capitalizing and deferring current expenses).

Instead of the common EBITDA, I propose SRECDA, meaning sales less receivables less expenses less capital expenditures plus depreciation plus amortization. This is almost like a net cash flow measure, and may be the better single indicator of a company's state of health. The above may still not prevent unscrupulous CEOs and CFOs from misleading investors, but it will at least limit their "creativity" options.

Dr. Rene B. Azurin

University of the Philippines

Quezon City

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