Posted On: Friday - July 15th 2022 4:55PM MST
In Topics: Economics US Feral Government Inflation
I meant to write about this half a year ago, as I'd gotten into a discussion about the US Post Office's "Forever Stamps". They've been around, like, forever. Groan away, but nah, it's been 15 years since the first ones, featuring the Liberty Bell, a shown above, were issued and sold.* 4 years later, in '11, all 1st-class stamps (as in made to send anything enclosed in an envelope weighing 1 oz or less) were issued as forever stamps.
I have a dim memory of 1st-class postage stamps going up into the double digit cents. The rise of stamp prices was pretty steady over the last half-century. (I'll have to find or make a graph another time.) The forever stamps came out at the time this postage went from 39¢ to 41¢. The year 2007 was near the end of the time that my instinct tells me was a period of the lowest price inflation in my lifetime anyway.. (This is something discussed 4 years ago in the Peak Stupidity post Inflation and Chinese Imports and Exports.) Having dealt with inflation the rest of my life, though, I was gung-ho for these stamps. Why not stock up on them, as long as I don't forget where I put them?
I neither had the money required then, nor thought about it, but stocking up on a serious number of forever stamps could have been an "investment" strategy. The word "investment" is in quotes, because, as with precious metals, this type is simply an investment in not losing one's ass to inflation. Let's say I HAD bought 10,000 sheets of Liberty Bell Forever Stamps at 41¢ each stamp, 20 on a sheet. That'd have cost me $82,000, but now I'd have $120,000, a 46% profit! OK, sure, that's only a 2.6% annual compounded rate. Yeah, but that'd have beat a CD at 0.5%, and I could have mailed lots of chain letters for my
Nope, I wouldn't have gotten rich, even if I'd bought 1 million sheets, as, like the precious metals, I'd have started with 20 million stamps (or about 625,000 oz of silver**) and ended up with 20 million stamps (or about 625,000 oz of silver). My point here is one shouldn't get fooled by inflation of the currency supply, as it's not like you've made money. At least, however, you haven't lost your ass. You've held onto your wealth.
"Wait now", you may be thinking, "are you seriously recommending the reader start accumulating USPS Forever Stamps?!" Well, no, I am not supposed to give out financial advice unless the Peak Stupidity Finance Department
* It's odd that this is one instance in which my memory expected a longer time-line. Normally, I am surprised that something is twice as long ago as I had thought, etc. If you'd have asked me about these stamps, I'd have said they've been around for 20-25 years, but I did my due diligence and looked it up.
** The equivalent amount of US currency would get each then, but, man, '07 was a few years past when it took only 4 pieces of green paper to buy an oz, rather than 13 or so in '07.
*** That's where the gold is, under there, right? Peter Schiff understands precious metals.
Comments:
Adam Smith
Saturday - July 16th 2022 1:26PM MST
PS: Good afternoon,
Stocking up on a serious number of forever stamps could have been an "investment" strategy if you stocked up on Janice Joplin, Jimi Hendrix, John Lennon and Elvis Presley stamps. Sheets of those stamps sell for a little more than double their postage value.
https://www.ebay.com/itm/373823051775
https://www.ebay.com/itm/153953934169
https://www.ebay.com/itm/374177375308
https://www.ebay.com/itm/114714028910
https://www.ebay.com/itm/115462827612
https://www.johnstonsarchive.net/other/postage8.gif
https://en.wikipedia.org/wiki/History_of_United_States_postage_rates#Historical_rates
☮
Stocking up on a serious number of forever stamps could have been an "investment" strategy if you stocked up on Janice Joplin, Jimi Hendrix, John Lennon and Elvis Presley stamps. Sheets of those stamps sell for a little more than double their postage value.
https://www.ebay.com/itm/373823051775
https://www.ebay.com/itm/153953934169
https://www.ebay.com/itm/374177375308
https://www.ebay.com/itm/114714028910
https://www.ebay.com/itm/115462827612
https://www.johnstonsarchive.net/other/postage8.gif
https://en.wikipedia.org/wiki/History_of_United_States_postage_rates#Historical_rates
☮
The Alarmist
Saturday - July 16th 2022 5:39AM MST
PS
You only capture full value by using them as postage stamps, but you can do a Putin and sell them to others at something of a discount.
As the Dead Milkmen once proclaimed in their song, “I Believe in Swordfish,”
🎶Why should we buy postage stamps
When we can make our own?
You only capture full value by using them as postage stamps, but you can do a Putin and sell them to others at something of a discount.
As the Dead Milkmen once proclaimed in their song, “I Believe in Swordfish,”
🎶Why should we buy postage stamps
When we can make our own?
Moderator
Friday - July 15th 2022 8:38PM MST
PS: Right, Mr. Russell, it has the same purchasing power. I'm really no financial guy - too conservative to be one - so that's why I compared this deal to having a savings account over this period. Except for possibly right in '07, rates were put down into the basement after the housing bubble burst.
Hmm, what about taxes? Thanks for mentioning that, as that would fit in with the Part 2 ... or 3.
Hmm, what about taxes? Thanks for mentioning that, as that would fit in with the Part 2 ... or 3.
Jack Russell
Friday - July 15th 2022 6:56PM MST
PS If you had bought $82000 worth of stamps back then you could have sold them today for $120000, but (by some measures) that's the same purchasing power. At least until you pay taxes on your $38000 mythical profit.
Yeah, the numismatic thing goes for precious metals and stamps both, but stamps have one particular use. Silver and gold both have industrial uses, and the money people say that the best money has no other uses - that way, it won't change in value due to industrial needs. (Postage stamps are a great example - how many are used compared to in 1990 before the www?)