Say you owned a small 10-pound inventory of coffee that you purchased for $3 a pound. Each week you'd sell me a pound for $3.25. Suppose a freeze in Brazil destroyed half of its coffee crop, causing the world price of coffee to immediately rise to $5 a pound. You still have coffee that you purchased before the jump in prices. When I stop by to buy another pound of coffee from you, how much will you charge me? I'm betting that you're going to charge me at least $5 a pound. Why? Because that's today's cost to replace your inventory.
The best laugh of the week came at the end of the column:
CEOs tend to be cowards when dealing with politicians and environmental extremists, but I have a recommendation that requires only a modicum of courage. At each gasoline station they should put up photos, perhaps videos, of penguins, caribou, polar bears and other critters frolicking along Alaska's coastal plain. Then have a voice-over or caption reading:
Don't be selfish. Your paying $3, $4 and $5 a gallon for gas keeps these critters happy and their play space clear of oil rigs.
Can you dig it? Penguins in Alaska!! I'm still chuckling!