Engineering Design, The Inflation And The American Financial Recovery

Inflation distorts prices. If there is inflation, you're better off spending the money now before it loses its value, so consumption now raises at the expense of consumption later.
Consumers may start borrowing (using credit cards) to pay for items they need. This means they will not be saving which causes uncertainty and additional risks at the banks which in turn causes interest rates to rise.
Inflation re-distributes wealth and income. Wealth moves from savers to borrowers.
Input prices (raw materials, wages and supplies) rise so business costs rise.
If there is inflation, workers will want pay raises.
Here are the consequences of inflation:
? Demand pull.
This means buyers want to buy more than sellers can actually produce; so sellers start to increase prices.
? Cost push.
This means business costs start to rise and sellers need to increase prices in order to compensate.
This means the government allows too much money to be created. If the supply of money rises, then the price falls just as if the supply of food rises, then the price falls. If the price of money falls, then it will buy fewer goods and services.
Product Design Efficiency is the best tool to take the edge off inflation
Inflation will bring a lot of competition. If there is a lot of competition in a market, businesses try harder to keep prices low to keep buyers.
We will start experiencing elasticity of supply and demand, including price variation adjustments in engineering contracts, partial deliverables etc.
Efficiency is the best tool to take the edge off inflation.
If costs rise there are two answers only. One is to raise prices. The other is to become more efficient so unit costs fall and profits are restored. The more efficient businesses are, the less likely it is they will have to raise prices, and the less likely is inflation. Efficiency will make you stand out from your competitors and will keep your business breathing.
Since efficiency is a problem-solving process that transforms an ill defined problem into a final product using scientific principles and technical information along with innovations, ingenuity or imagination in the definition of a mechanical device; the design process time to market, becomes a key element for manufacturers and designers.
American inventiveness is the weapon against inflation and the base for the economic recovery.
God bless America.

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