(Very) Poor Man's Gold [vanity posting]

USPS ^ | 7 Jan 2009 | Docbnj

[docbnj]

(Very) Poor Man's Gold.

The post office sells the new Liberty Bell "Forever" stamps, which have no denomination, but are good each for one first-class letter. These are not only convenient (you don't have to remember the latest first-class rate), but they are like gold. They increase in nominal value as the first-class rates increase, and are a hedge against inflation.

As with gold, you also lose the use of the money invested in them, so you get no interest; but on the other hand, there does not seem to be any way for the tax people to get you for capital gains when you use these stamps, as they can for other anti-inflationary hedges.

Regular stamps are a notably poor investment, because they have denomination tied to the value of the dollar at the time they are issued. Thus, a first-class stamp from my youth was denominated 3 cents. Even a usual mint commemorative from those days is not worth 42 cents (which is would have to be merely to have kept up with the real cost of mailing a first-class letter). So stamp collecting is a poor investment. It may be a nice hobby for low-grade introverts, but it does not pay.

It used to be that kids could earn geography and some history by collecting stamps; but now there are impossible numbers of them issued purely to raise money for loser regimes and to spread propaganda, so one is better off reading quality books.

The Forever stamp is something different. It is not suitable for large investors, but in a very small way it is like gold.

[KarlInOhio]

Funny thing: I don't use stamps all that much any more. Christmas cards and the water bill. Everything else gets paid online.

I still have one stamp left from my 2007 Christmas stamps. With this January's tax bill I finally be able to use the extra book 2008 Christmas stamps I bought. If I'm lucky those will last for the rest of the year.

[bert]

I got a postage paid envelope yesterday from the RNC that had one of the $.41 Liberty Bell stamps....... and a $.01 stamp as well. Guess someone didn’t get the “it’s like gold” memo.

[Condor51]

I bought 300 Forever stamps online from the USPS before the last increase. I use three per month on average, so I'm good for over eight years. (if I'm still kicking by then)

And in eight years 1st class postage will be about $75.00. The down side is, Congress will prolly put an inheritance tax on them. (not sarcasm)

[DrC]

“I bought 200 stamps. That should last me a couple years and I’m pretty sure the post office will lsat that long.”

Fantastic: you now have an $84 hedge against inflation! By the time Obama’s done, that might buy you a couple of gallons of gas.

[Hoplite]

I hope they work better as gold than as food stamps.

I ate $10 worth of those things and was still hungry.

[Camel Joe]

As good an investment as gold without taking physical possession of said gold. The Gub’ment can declare your certifcates and the stamps worthless when they so choose. I hear it is VERY hard to actually get anything more than a promise of gold these days.

[mnehring]

I actually have been encouraging friends not to buy just raw gold, instead, invest in something like a Gold Rolex. You have value two ways, one of course is the raw value of the gold, the other is the inherent value of the watch. This way, if Gold doesn’t hold its value, you have another value opportunity. Rolex (and a few other high-end Swiss brands) are known to hold their value well, if not go up.

[Condor51]

She accused me of lying and got her supervisor who ordered me out of the building lest he call the police. I had made no accusation or implied any, only asked why my letters all came back. The clerk showed me the liberty bell stamp and accused me of “disorderly conduct.” ... They started accusing and threatening immediately.

For a moment I thought you went into my local post office. I'm *at war* with them and was barred from going in or they'd call the cops.

Which was fine with me as I turned them in to the Postal Inspector's Office in D.C. for theft. I filed a formal complaint. A couple days later I got a call from the manager of my Post Office - he was so nice I thought he wanted to date me. I guess D.C. came down on them pretty hard ;-)

But I still avoid going in. They're a bunch of slugs.

[yankeedame]

It will only retain their value as long as we have a postal system. If technology makes the USPS obsolete, you will have some pretty collector’s items, that’s about it.

So, my friend, are so right! Thinking along those same lines ('the poor man's gold) last year, with part of my income tax refund, I bought something like $200 worth of Forever Stamps. The long and the short of it is: What with email, on line bill paying, etc. etc. I'm glad these Forever stamps are good forever... 'cause that's about how long they're going to take to use.

[mnehring]

Well, you never know, if the USPS goes under, they may suddenly become as valuable as the “Penny Black”

[refermech]

Actually the price of stamps is going up in May, so I saved myself a few bucks.

[Myrddin]

Unlike gold, you may have trouble selling your "Forever Stamp" to recover the money. You won't get the current selling price as anyone can buy them for the current price. You might be able to sell at a slightly lower price than the current post office price, but possibly more than you originally paid. The value of the time spent trying to recover the original "investment" may well exceed the recovery.

[DrC]

“The fruits of this article requires a trust in government.”

Exactly. And if you trust government, then a much better inflation hedge is TIPS, which pay interest ON TOP OF inflation-adjusting your principal. So it’s like Forever stamps that pay interest:

“The U.S. Treasury has been issuing Treasury Inflation-Protected Securities (TIPS) since 1997. TIPS provide investors with protection against inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index. (CPI-Urban, Non-Seasonally-Adjusted with a 3-month lag)

When a TIPS matures, the investor is paid the inflation-adjusted principal or original principal, whichever is greater. Since a TIPS investor won’t receive less than the original principal, the investor’s original principal amount is protected against deflation as well.

TIPS pay interest semiannually at a fixed rate. The rate is applied to the adjusted principal; so, like the principal, interest payments rise with inflation and fall with deflation.” http://www.treasurydirect.gov/instit/marketables/tips/tips.htm

“Wasn’t it in 1913 that congress said they’d never raise payroll taxes higher than 2%.”

No: it’s actually worse. Payroll taxes didn’t arrive until Social Security in the 1930’s. You’re thinking of the income tax, first made constitutional by the 16th amendment, ratified in 1913. The original tax rate was only 1% and that only applied to those with incomes above $3,000 (I don’t know the exact %, but this group constituted only a small fraction of the population: possibly 2%!).

“The presidential election of 1912 was contested between three advocates of an income tax. The winner, Woodrow Wilson, after the ratification of the Sixteenth Amendment, called a special session of Congress in April 1913, which proceeded to pass an income tax of 1% on incomes above $3,000 and applied surcharges between 2% and 7% on income from $20,000 to $500,000.”
http://www.mises.org/story/1597

[sportutegrl]

The old Disney Park Hopper tickets work the same way. They never expire and they can be used by anyone, (pre-biometric tickets). As a matter of fact, if you have the old pre-hopper admission and book of 20 ride tickets, (A B C D E), you can use this for a one day admission to any of the theme parks, worth about $70, now.

[DrC]

“the price of stamps is going up in May, so I saved myself a few bucks.”

That assumes BHO won’t have bankrupted us by then... :-)

[Balding_Eagle]

Bump for future reference.