The United States Postal Service this week announced that all future first-class stamps are sold, so-called "never stamps" that have no value, but guaranteed, the cost of sending a first-class letter cover no matter what the cost may increase in future. Currently, these stamps are sold at 44 cents, but it will increase the price if the postal rate hikes.
Apart from the decline of the brand of one percent, the news is interesting on two fronts: it provides information on government accounting very irresponsible and provides investors with an attractive rate of inflation by the government guarantees the protection of federal property on the market today.
Over the last fifty years, the rates of postage for USPS first class 20 times. Meanwhile, the price of stamps rose over 1,100%. Given the increasing frequency of interest rate increases (three in the last four years), the post he made the trip more stamps, money raised to save on printing costs and the convenience of customers. The public seems to appreciate the product and dismantled incredible 28 billion Forever stamps since they were available in 2007.
But the real reason for the constant change is that the post office, its insolvency figures behind the false billing Hide allows financed the institution itself for a massive bailout by taxpayers in the near future.
Much like Greece can be classified in the euro zone of false accounting, the Postal Service to use creative accounting to prevent significant cuts in today's wages and benefits. Always placing stamps moves, post transmit future revenues to pay current expenses. But today, all brands with a label that are not yet sold in the future. Now the revenue earmarked submit the income gap so that tackle the scourge of the post in the coming years. The only just begun, as the exercise of intractable problems that the USPS can not be solved by more conventional means.
The Post also know that their ability to sell stamps at higher prices than ever before, remain reserved in the future. Individuals and institutions could collect stamps now be sold in competition with the Post Office. Although the post may not always free for cash bonds are, who is no law against price-fixing of the market. How many stamps the post office can always be sold at high prices if the customer can buy at a discount on eBay?
In this sense, nor the low to investors with the more conservative a more attractive alternative to checking accounts zero interest, the yields of treasury bills, or the Inflation Protected Securities by the government (known as known as TIPS).
In view of these brands are completely liquid, is the only way an investor to lose money on the stamps could not, whether the price of postage down. It can think no human being on this planet, it is a likely scenario. On the other hand, if postage increases are below inflation, stamps a safe bet.
And contrary to government advice or not, investors pay a premium above face value for the privilege of purchasing stamps. While the stamps do not pay interest, do the extremely low rate of government bonds offered not fundamentally changed the investment calculations comparison coupon bonds. More importantly, the seals by a real, consistent service, mail delivery backed up while U.S. Treasury is supported by nothing more than a printing press.
Seals are always the closest to a sure thing that most people never get. In the past 10 years, the key words of up to 29% while the S & P 500, is a paltry 0.1%. With the cost of labor and other grow inside the Post continues, there can be no doubt that the price increases come in large numbers. The minimum investment amount is not always only 44 cents postage, brokerage. Also an added bonus, if you use the brand yourself, you pay no taxes on capital gains.
Of course, without a federal rescue of the possibility of the post will go under, and always end seals for food bird cages. But the history of government bailouts and the influence given to the union post, chances are high that still need to save the post office plans. Accordingly, seals are still a better choice than treasury bills. They also have better pictures.
Peter Schiff, president of Euro Pacific Capital and the host of El Show de Peter Schiff.
For a detailed analysis of this issue and other facilities, the global investor Peter Schiff subscribe to newsletters.
Apart from the decline of the brand of one percent, the news is interesting on two fronts: it provides information on government accounting very irresponsible and provides investors with an attractive rate of inflation by the government guarantees the protection of federal property on the market today.
Over the last fifty years, the rates of postage for USPS first class 20 times. Meanwhile, the price of stamps rose over 1,100%. Given the increasing frequency of interest rate increases (three in the last four years), the post he made the trip more stamps, money raised to save on printing costs and the convenience of customers. The public seems to appreciate the product and dismantled incredible 28 billion Forever stamps since they were available in 2007.
But the real reason for the constant change is that the post office, its insolvency figures behind the false billing Hide allows financed the institution itself for a massive bailout by taxpayers in the near future.
Much like Greece can be classified in the euro zone of false accounting, the Postal Service to use creative accounting to prevent significant cuts in today's wages and benefits. Always placing stamps moves, post transmit future revenues to pay current expenses. But today, all brands with a label that are not yet sold in the future. Now the revenue earmarked submit the income gap so that tackle the scourge of the post in the coming years. The only just begun, as the exercise of intractable problems that the USPS can not be solved by more conventional means.
The Post also know that their ability to sell stamps at higher prices than ever before, remain reserved in the future. Individuals and institutions could collect stamps now be sold in competition with the Post Office. Although the post may not always free for cash bonds are, who is no law against price-fixing of the market. How many stamps the post office can always be sold at high prices if the customer can buy at a discount on eBay?
In this sense, nor the low to investors with the more conservative a more attractive alternative to checking accounts zero interest, the yields of treasury bills, or the Inflation Protected Securities by the government (known as known as TIPS).
In view of these brands are completely liquid, is the only way an investor to lose money on the stamps could not, whether the price of postage down. It can think no human being on this planet, it is a likely scenario. On the other hand, if postage increases are below inflation, stamps a safe bet.
And contrary to government advice or not, investors pay a premium above face value for the privilege of purchasing stamps. While the stamps do not pay interest, do the extremely low rate of government bonds offered not fundamentally changed the investment calculations comparison coupon bonds. More importantly, the seals by a real, consistent service, mail delivery backed up while U.S. Treasury is supported by nothing more than a printing press.
Seals are always the closest to a sure thing that most people never get. In the past 10 years, the key words of up to 29% while the S & P 500, is a paltry 0.1%. With the cost of labor and other grow inside the Post continues, there can be no doubt that the price increases come in large numbers. The minimum investment amount is not always only 44 cents postage, brokerage. Also an added bonus, if you use the brand yourself, you pay no taxes on capital gains.
Of course, without a federal rescue of the possibility of the post will go under, and always end seals for food bird cages. But the history of government bailouts and the influence given to the union post, chances are high that still need to save the post office plans. Accordingly, seals are still a better choice than treasury bills. They also have better pictures.
Peter Schiff, president of Euro Pacific Capital and the host of El Show de Peter Schiff.
For a detailed analysis of this issue and other facilities, the global investor Peter Schiff subscribe to newsletters.
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