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Postal regulators want 2-cent stamp hike - new 'forever stamp' plan

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Postal regulators want 2-cent stamp hike - new 'forever stamp' plan

Old 05-26-07, 05:12 PM
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Originally Posted by caligulathegod
http://www.slate.com/id/2166475/

Should I Invest in "Forever" Stamps?Absolutely not.
By Nathaniel Rich
Posted Thursday, May 17, 2007, at 4:10 PM ET

The postal rate climbed 2 cents on Monday, about a month after the United States Postal Service introduced its new "forever" stamp. As of last week, the USPS had sold more than $82 million worth of the forever stamps, which lock in the 41-cent rate for eternity. One man in Pennsylvania walked into a post office and made an $8,000 investment on his own. Should we all be stocking up?

Absolutely not. Since 1971, postal rates have increased more slowly than the actual inflation rate, as measured by the U.S. Consumer Price Index. So, despite the numerous rate hikes over the last 36 years, stamps have actually been getting cheaper. The 20-cent stamp from 1981, for instance, would be equivalent to 45 cents in today's dollars—which makes today's rate 10 percent cheaper than it was 26 years ago. Should this historical pattern hold, you'd be paying more for today's forever stamps than you would for any stamp in the future, no matter how high the rate goes.

In fact, this pattern must hold—as a matter of law. In December, President Bush signed the Postal Accountability and Enhancement Act, which ensures that future price increases will be kept below an inflation-based ceiling. In other words, postage hikes will never surpass inflation—and the forever stamp will never become a good investment. Incidentally, the USPS announced the introduction of the forever stamp less than two months after Bush signed the act into law.
One thing people don't think about is that this isn't exactly like your traditional investment. You have to hold it yourself -- in other words, if you lose the stamps, you are shit out of luck.
Old 05-26-07, 05:21 PM
  #77  
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Originally Posted by OldDude
Or, you could wait and buy them after the next rate increase is announced but not yet implemented. Then, you PROFIT. Timing is everything.

That's really about the only advantage of them. That and the convenience of not having to buy 1-2 cent stamps after rate hike time. Buying a 1000 to hedge against future inflation is actually losing money in the long run, no matter what the price goes to.

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