Stamp collecting

May 05, 2006

Gather round, all you investors and hedgers, all you inflation-fighters and savers.

Here's one new concept that promises to be a sure thing - well, almost. The U.S. Postal Service, in proposing yet another increase in the price of a first-class stamp, is also talking about offering a "forever stamp."

You would buy it now. And no matter how much the price of a first-class stamp rises, you could still use it.

Think of the financial possibilities.

A first-class stamp now costs 39 cents, having gone up 2 cents in January. The Postal Service would like to raise that to 42 cents by next May. If you could buy forever stamps in advance of that increase, that's a 7.7 percent return - if you also could find buyers at the new price.

It would be almost guaranteed, right? Folks always need stamps. The price of stamps is always going up - 13 times since early 1974.

In fact, if you could have invested in forever stamps back then - at 8 cents each - you'd be sitting on something like a 400 percent return by now, with very little risk.

Of course, you'd have to buy and sell a lot of these stamps to make any money worth mentioning. And the Postal Service would have to be willing to print a lot of them - with each forever stamp sold potentially cutting into its future revenues.

It would be like those zero-interest loans that U.S. automakers have used to lure buyers - with each sale cutting into future, not so heavily subsidized sales. In fact, we wonder if that's where the Postal Service, which will lose $2 billion this fiscal year, got the idea.

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