BoingBoing has a great post with a roundabout explanation on why the dollar is causing headaches for consumers because some businesses are trying to weasel their way out of the reality of inflation — Why HP’s region coding excuse is bogus:
If a company is doing business in two major regions of the world and the currency is sinking in one region (the U.S.) and rising in another (Europe) then the company has to worry about the fact that it might be buying things in the more expensive currency while being paid in the sinking currency. In simple terms, HP has to worry about being paid $1US today, then try and buy $1EU of stuff next week, when that US dollar is only worth 80 cents in Europe – they just lost 20% on that transaction.
However, there’s a simple defense for global companies in this situation – price in a larger profit margin on goods sold in the sinking currency, as a buffer against the value being lost in that currency. HP’s printer cartridges should be more expensive (comparatively) in the U.S., to make up for the fact the the $40US (!!) you pay for a cartridge might be only worth $38 in global purchasing by next week. That’s not what’s happening here though.
(Some people might complain at this point that HP raising prices in the US would not be a good thing, because it’s promoting US inflation. Duh!! Why do you think all the economists are so upset about the sinking US dollar and America’s huge debt?!)
A great read and puts the regional pricing schemes of companies like HP in a new perspective.