44 cents to mail now!!?

Starting Monday, it costs more to mail
http://www.cnn.com/2009/US/05/10/stamp.prices/index.html

Shoot… got to go get the 2 cent stamps… dude! Only if I had bought the forever stamps…

Wait a minute… huh? Why the hack then would anyone buy the 39 cent stamps or 42 cent stamps? The cost is one issue, and going to the post office to get the extra stamps is another. Two strikes against that. I don’t get it…

I mean… why not everyone stocks up on stamps? Ever since 1919, the stamp price has ever been increasing [costofstamps.org]. So then, why not simply buy the forever stamps?

If you bought 1000 stamps in 1919, it’ would have cost you 1000 x $0.02 = $20. Using these 1000 stamps today will give you financial value of 1000 x $0.44 = $440 !!! That’s 22-fold, or 2200% profit! So each year, you make 2200% / (2009 – 1919) = 24.4% . Wow… That’s much better than putting money in your CD! In fact, that sounds like an investment idea, doesn’t it?

Not so fast… at least that’s what they want you to think. If there were no inflation, then yeah, let’s all go get the forever stamps now, as this stamp price curve seems to be an ever-rising stock.

Let’s compare CPI with the stamp rate:

thesimpledollar.com

Interesting…! You see, the stamp rate (green line) is following the CPI (blue line), always being a little bit higher. The only times the stamp rate was lower were right before the price increase.

So, keeping tons of forever stamps won’t help you much in terms of investing. However, it is true that you will get the best deal by buying the forever stamps right before the rate goes up.

I am almost done here. Just one more point.

I honestly think that this is a win-win situation.

In the post office’s point of view, that “deal” for the consumers is probably not significant. After all, selling a roll of 2 cent stamps may be even a bigger loss, both in manufacturing and service fees.

Conclusion: relax, especially for those who don’t mail that frequently.

That’s my two cents.

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