According to the Government’s figures, inflation is just 4%. That means, on an average, the cost of a diversified basket of goods has only risen by four percent.

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However, most Americans know for a fact, that inflation has hit them harder than that. So why is it, that the government keeps telling us that Inflation is only a fraction of what it really is?

According to Alan Chernoff, who is an Inflation Expert, the government calculates inflation based on a Consumer Price Index (CPI), which determines which goods should be taken into account for determining Inflation. Also, each commodity has a ‘weight’ which shows just how important that commodity is in determining true inflation.

Chernoff shows that most commonly used commodities like rice, milk and flour, have increased in price by over 13%, whereas, their role in calculating the CPI is less that 1%! This is the reason that the CPI shows a value of inflation that is far lower than what the average American faces.

Also, the cost of Fuel Oil has increased by 48%, whereas the cost of Gas has increased by only 5%. Because of this, some people are hit much harder by inflation than others. Natural Gas also has a higher ‘weight’ since more peple use it. Items like computers haven’t increased as much in price.

So now you understand why you sometimes feel that inflation has increased much more than what the government says.

The price of Oil and Gas are determined by a factor of demand and supply. When that supply is restricted, either naturally due to unforseen calamities, or artificially through cartels, how much can the government do try and contain the fallout - Increased costs of oil and gas for consumers?

These are political answers to the problems, and it may be worthwhile to see just how it can happen.

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Tax Holidays on Gas

The government levies a tax on each gallon of fuel. This causes the prices to go up. It is possible to slightly limit the price increase by granting a Tax Holiday on Gas during peak demand to ease the burden on the consumer. The downside is, that the government needs this money for other infrastructural purposes.

Taxing the Oil Companies, with a Windfall Profit Tax

This does not directly affect the oil prices, but it does make it easier for the government to make up for the loss incurred by granting a Tax Holida.

A Windfall Profit Tax on Gas would tax the Oil companies upto 50% beyond a certain profit figure.

This measure can even be used without Tax Holidays. It can be used to directly help citizens pay their energy bills.

Monitor Gas Prices to Prevent Manipulation

Due to reasons that effect the supply of Oil and Gas, the prices of thse fuel commodities can be artificially increased to serve vested interests. The government can take extra measures to crack down on these manipulated factors.

Limit the Political Influence of Oil Companies

Due to their huge financial resources, Oil companies do have a certain amount of Influence on the government through various channels. In times of crisis, the government can take steps to limit this influence in order to stabilize prices.

Current presidential candidates like McCain, Clinton, and Obama are promising combintations of these different strategies to help woo the public, and no doubt, actually reduce Gas Prices.

Companies that are concerned about their brand image face a new problem with the advent of the Internet. That problem, is the grey market. The Grey Market consists of unauthrorized dealers of a company’s product, that get their hands on it by several means, including buying directly from the wholesalers.

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The problem is, that these dealers are able to sell goods much more cheaply than either the manufacturer, or the authorized dealers can sell, simply because they do not have to offer a warranty, or any other customer service. It’s just buy and forget.

When something goes wrong with the product, and the unauthorized dealer can’t come up with the service, customers naturally blame the product itself, jeapordizing it’s brand image.

And the problems don’t stop there. Genuine authorized dealers are losing a huge share of their market to these grey dealers. John Ferreira at Archstone Consulting says “Between the manufacturer and the end customer, there are huge networks of intermediate distributors. It’s easy for products to trickle outward.”

This has been exacerbated by the advent of the Internet, where any unauthorized dealer is now able to sell to the whole world at prices that are between 30-40% less than the real price.

It therefore becomes important for a company to know where it’s goods are going. To help with this, there are softwares available like Net Enforcers and Cyveillance, that track where in the Internet your products are appearing.

But some vendors are using their own images, and by means of other techniques, they are finding ways to circumvent and make it difficult for themselves to be found.

“When a manufacturer’s goods sell for cheaper prices or through disreputable channels,” says Ferreira, “the company will eventually have to bring its prices down, or suffer lost revenues.”

Not everyone is being affected by the economic downturn. In fact, this is the time when the tough get going. Or in this context, the small get going.

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Being small is not always bad. Sometimes it allows you to adapt faster than any big corporation can. This has led to the popular phrase ‘Elephants can’t dance’. Jim Champy, author of Re engineering the Corporation has now written another book Outsmart, which describes how small companies are surviving in these times.

Take Control in your Own Hands

Special Application Robotics was deeply in debt when Michael Cappello took over the company as CEO and co owner in 2001. One of the first changes he made, was to take back all the core company jobs that were being outsourced. The logic being, that you don’t hand over your success to anyone else.

The company produced highly specialized and customized robots that performed dangerous tasks, and had to be manufactured with high precision. Cappello felt that these cannot be outsourced to providers who can hold the company to ransom. “I can’t subject myself to being a victim. If I promise a customer a delivery, I don’t want it to depend on some subcontractor coming through with his piece of it,” he said.

So the lesson is ‘Take Control of your core processes’

It seems that quite a few people are afraid to invest into the stock market simply because of fear of the unknown, or because they think it’s too risky. Such people have as much in $80,000 sitting in cash, or in Money-Market Fund, which gives paltry gains of 3-4 percent.

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It’s really a question of mindset, as most people are simply too young to play it safe. There are several equity instruments called ‘Fund of Funds‘, which invest not directly in shares or bonds, but in other investment options, and thus achieve a greater amount of diversity to spread you risk.

In fact, there are funds that are tailored to suit young people. These are called ‘Life Stage Funds‘. They basically allot a percentage of your investments to debt instruments that provide stability, and a certain percentage to stock, that provides high growth over a long term horizon. The actual percentage will depend on how old you are. If you are young, then you need less short term certainty, and more long term certainty. Therefore, the percentage of funds to debt will be low, say 20%.

Older people will have a much higer component of debt, since they need stability in the later part of their lives more than anything else, and will therefore have a debt component of upto 80%.

Funds like this will help young investors to ride the market long term, and start planning their retirement.

The idea is one that borders on the facetious. But why not? Let’s look at the facts.

America is a country that has, over the last two centuries, idealized the model of the slim woman. This is relatively modern concept, as when you look at the paintings of the renaissance, women are nice and rounded. The Mona Lisa herself seems to be smiling in hearty rememberance of a Midnight snack.

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In any case, be that as it may, every woman’s magazine talks about slimming and losing weight. In addition to that, every doctor is crying out for American’s to start lowering the waistlines to prevent heart disease, and other obesity related problems. This has always been difficult to follow, simply because we all love eating.

However, we now have another incentive to eat less. The rising prices of groceries mean that we are paying more to eat the same amount of food. How about another strategy, eat less, to pay the same amount of money? I kid you not! It makes sense that every American should use this time of crisis to do what matters most to them.

It’s a Godsend. It seems that this is the perfect opportunity for parents to give their kid an excuse for making them eat less. It’s the economy! It’s not their fault. What a way to do the right thing for your child!

In the past few years, gadget manufacturers have tried to leverage technology in order to get the most out of each gadget as such. Whether that was using new hardware to deliver better music, or using higher MP cameras to take great resolution photos, the focus was always on having each phone do the most it can.

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But how far down that line can you go? Beyond a point, all devices offer the same thing. But all that is changing, with Manufacturers like Nokia and Blackberry realizing, that the future of gadgets is connectivity.

In addition to showing how business can make use of collaboration, the Web 2.0 Expo also showed how gadgets are becoming more and more Internet Centric. For example, Christy Canida, shares a new idea where anyone can put up their pet project on how to do anything, in an easy manner with each step being explained. Users can then add comments, snaps, and videos to the entry.

Similarly, Lenn Pryor from Nokia reveals that Nokia’s strategic shift to the Internet in the past one year has led to the development of Web Based services, with complex collaboration features built into their handsets. Earliear, Microsoft released their Live Mesh Idea which you can read about here.

Yanting Li of Tellme Networks displayed a Blackberry that you can talk into, and get the details of any restaraunt in the area, and call.

These Internet services show the direction that technology is taking, and will build upon in the years to come.

You would think that being rich and owning oodles of cash is something to make everyone happy. But most rich people say that they are sick of being rich, and wish to be like other people. Whether they’re power brokers, or rich industrialists, they all claim to share the feeling that being rich is a bummer, and being rich is a drag.

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Andy Serwer, a journalist however, feels that it’s all just hot gas, and if they feel that way, why can’t they just ‘Put a sock in it’, or quit?. He says that there are  hundreds of things rich people can do to make theirs, and everyone else’s life better. They have shareholders to whom they owe an obligation to reward, they have hundreds of employees, whose lives they make better.

However, sometimes they have to fire people based on the situation, and that’s business in the fast lane. Sewer feels that they shouldn’t feel guilty about it, and proudly proclaim the fact that they happen to be rich.

However, this could all be a put on for the journalists, and Sewer says that he is sick of it and doesn’t want to hear anymore! He just wants someone who tells the truth.

The Web 2.0 Expo, is a Trade Show and Conference that is probably one of the most anticipated software expo’s of the year. It showcases the latest trend in Web 2.0. Michael Copeland who visited the expo this year, says that the biggest difference between this years’s expo, and last year’s expo was that in the previous year, most collaborative software was geared towards the consumer.

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However, this year, it seems that all software is geared towards Business, and how to make corporations use the new collaboration concepts that Web 2.0 promises, in order to make their employee’s life more efficient, and productive.

For Example, a booth showcasing a technology called ‘Sprout’ promised the easy creation of flash like websites without the use of coding at all. The content could also generate features like RSS feeds. The idea is to solve the problem of content creation that most companies were facing.

IBM on the other hand, was showcasing ‘Lotus Connections’, which uses collaborative software in the office. So for example, if an employee required a domain expert in a particular subject, the software, would show them the profiles of those in the company who could help out.

Software like this is designed to make the workplace easier, and underscores the idea that collaboration iand teamwork in the office is really the best way to get things done.

Microsoft is known for it’s computing architectures that are closed to a lot of things that are Non-Microsoft. Open here doesn’t mean open source. It means open standards.

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An Example. Suppose someone wants to use Microsoft Project Server. They purchase it. Can they use it without buying other Microsoft Products? NO! One needs to have Microsoft Server running on the computer, since Project Server only installs on that particular platform. Also, Project Server uses MS SQL as a backend database, which is also a Microsoft Product. You can’t use MySql, Sybase, Oracle, or any other Non-Microsoft Database.

So to use one Product, you need to use a who lot of other Microsoft products as well. That, promises Microsoft, may be changing. At the recent demo of Microsoft’s ‘Live Mesh’ service, Microsoft promises to connect all the different devices a user has via the Internet, into an abstract storage space called ‘The Cloud’, which will reside in Microsoft’s datacentres.

The best part is that even if you’re using a Mac, or Linux on one of your devices, you will be able to connect! George Moromisato, a software designer who is working on Live Mesh, promises that unless it’s open standard, people just don’t want to use it, and this is forcing Microsoft to change it’s stance, unless it wants to get booted out of the Internet services altogether. And Microsoft is not stupid enough to let then happen.