Posted On: Monday - July 18th 2022 8:20AM MST
In Topics:   Economics  US Feral Government  Inflation
(Continued from Part 1.)
Could Liberty Bell postage stamps be used as money? (Well, the US Postal Service prints other kinds too... but the key word here is "print".) Peak Stupidity brought these stamps up in the previous post to help in thinking of the concepts of money and inflation.
The reason the "Forever Stamps" were issued for in the first place was due to inflation of the US Dollar causing the Post Office to continually have to charge more for postage. When it came to first class letters, people accumulate stamps, more so in the past (which we'll get to in a bit here), and it was a hassle to lick* and paste on a number of them to add up to the new required 1st-Class postage level. I imagine this got to be as much of a hassle for the USPS as it was for senders of letters. Sales of all different "denominations" (I remember 1¢, 2¢, 5¢, etc, as if they were monetary denominations), eventually out of machines, and bad arithmetic caused headaches. These Forever Stamps were a great idea, IMO, and an easily understood small hedge for inflation, so long as you were an organized person and remembered where you put them, that is.
I went and looked up the properties of money, something I had read on 20 years ago. What makes something useful as money comes down to a few properties, though I see that these vary slightly according to the armchair economist writing about them. Here's a nice infographic that I think covers these properties reasonably well:
* Fungibility - One unit is viewed as interchangeable with another.The top of that infographic I linked to above also shows the 3 (are there any more?) functions that something must fulfill to be useful as money. Those are:
* Durability - An item must be able to withstand being used repeatably.
* Divisibility - It can be divided into smaller units.
* Portability - Individuals can carry it with them and transfer it to others.
* Acceptability - Everybody must be able to use it for transactions.
* Uniformity - All versions of the same denominations must have the same purchasing power.
* Limitation of Supply - The supply of it in circulation must be limited to ensure values remain relatively constant
* A Unit of Account.
* A Medium of Exchange.
* A Store of Value
Of the properties listed above, different ones in combination determine the usefulness of the alleged money for the 3 functions. The collecting of, and use of, sheets of stamps rather than pieces of green paper seems to fulfill most of requirements for their being considered money. (Durability is somewhat questionable.) In other words, they COULD BE used as money, currency at least, but it comes down to that Acceptability.
Is the Acceptability property for stamps only based on the stamps being useful for one purpose, mailing letters? Over the last 25 years, since the internet, that use has gone down drastically. Many people hardly ever use stamps anymore, and rightly so.** Does that take the value completely away from these stamps? I don't know. So long as some people use them, those people would be glad to "buy" them from me for a slight discount, so at least keeping them was that inflation hedge. I put "buy" in quotes there, as it'd be just exchanging one form of currency for what could be another. Both of them don't have the very important property of "Limitation of Supply".
There are two parts to that, by my way of thinking:
1) A maybe not unlimited, but at least not limited, supply due to counterfeiting. We all know about that regarding US paper currency. As for the stamps, I ask the read to note that line through the word "Forever" on the image of the Liberty Bell stamp above. I had to read on that, but, yes, it's about counterfeiting. I will state right now, that I could undo that line in 10 minutes using MS-Paint, and much quicker after some practice with Adobe (or whoever owns it) Photoshop.
That gets to the point of "is is worth it?" The way inflation is, it may not be worth it to counterfeit US twenties anymore. (Going forward, I also foresee a problem with being a White man trying to reproduce a fat-ass black Tubwoman.) As for the stamps, in sheets of 20 worth only $12, it'd be way easier, with such simpler designs, printed on glossy label paper. However, I'm thinking of the old Liberty Bell ones, but there are much more colorful shark ones, astronomy ones, etc, now. Maybe they've been making them harder to copy, but then it may be just because nobody cares to make the effort.
2) A truly unlimited supply due to the actions of the US Government. Peak Stupidity has been all over this topic. With the help of their little buddies over at the Federal Reserve, they have expanded the supply of Dollars enough over the years to cause the inflation we see and have seen.
With these Forever Stamps, the idea is that you can ALWAYS mail a letter with one... forever. They are closer to gold in this sense (only), in that they have this inherent value of being able to get always one ounce*** of stuff sent to anywhere in the country within, well, there's rain, sleet, hail, supply-chain issues...
Wait, forever is a long time. Instead of "For Ever and Ever, Amen", it's really going to be much more like until the USPS says something to the effect of "Screw this! We can't honor millions of those Forever Stamps, when it now costs 18 dollars to move an ounce of mail, since, you know, the hyperinflation and all. OK then, you can get NEW Forever Stamps at $18, and you can even trade in 30 of the old ones for each." Does this remind you of anything? Franklin... anyone ... Delano ... anyone ... ?
This has been nothing but a thought experiment. If you'd had been a subscriber to the the Peak Stupidity newsletter since '07, you'd have bought sheets and sheets of these to put into ammo cans... to then cash out (but how? You'd know if you had subscribed) and gone long in the floor sticker sector in January of '20. But, NO!! You didn't want to pony up the 2 bucks per email, for just the price of half a cup of coffee or the postage for a letter sent back to a poor helpless email scammer in Nigeria...
* Yeah, that's been a while too, the licking of stamps! I didn't see a problem I thought the glue tasted pretty good, really ...
** I think I should explain why I even brought up stamps here, as maybe you are with the folks that hardly ever use one. It is a privacy issue for two things: 1) Very rarely, sending a letter is a good option, assuming the USPS scans and records nothing but the outside, may be a better idea than "shooting" an email. 2) Much more commonly for me, the sending of checks for bills is worth the advantage of not having credit cards or bank account #s on file with every Big Biz outfit I deal with.
Regarding the latter, I did get smart and realize that sending a check with a stamp costs me a buck each time (not to mention my time), so I would pay some bills ahead by 4 or even 6 months a while back. However, with the shenanigans of one internet company and the lack of leverage it gives one when Big Biz decides to screw me I have gone back to month-to-month payments - no, not entirely optimum.
*** An Avoirdupois ounce vs. a Troy ounce, such as Gold and Silver are measured in. An Avoirdupois oz is 28.35 gm, and a Troy oz is 31.10 gm. Therefore you need two Forever Stamps**** to mail a Silver dollar, but I don't recommend the practice!
**** or 24¢ in additional stamps stuck on there, unless you meter the letter, introducing possibly another step in the chain of postmen, one of whom might be crooked and nap your coin.