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Sounds pretty good these days, doesn't it?
New stamps set for rate increase in May
The price of a first-class stamp will go up by 2 cents to 44 cents on May 11, and several other rates will also go up.
The Forever stamp will continue to cover the price of a first-class letter, but it will also rise in price when the rates go up.
Simply buy the forever stamps before May 11th and then use the stamps any time in the future. That's a 4.76% return the first year and you won't ever have to pay tax on it. Heck, there's a decent chance that returns in future years might even be higher. Who knows!
Here's an arbitrage strategy. Sell your 3-Month Treasury Bill yielding 0.19% and use THAT money to buy the stamps. It's a 4.57% differential. Genius!
Still not convinced? It would take a whopping 25 years to earn a total of 4.76% interest at today's 3-Month Treasury Bill rate and that even assumes you'd be paying no taxes on that interest.
The Fed decided that printing money was the best solution to our problems yesterday. Let's not forget that they can repeat the solution as many times as they like. A trillion here and a trillion there and pretty soon we're talking about real money.
Gold Jumps, Oil Tops $50 as Inflation Concern Spurs Commodities
“We are in completely unknown waters here.”
A guaranteed 4.76% tax-free return, that's what I'm talking about. The person in front of me at Costco actually wanted 200 stamps versus my meager 100 stamps. Maybe she's just starting her hoard though. Get out the disco balls. It's party time, again.
I wish I could tell you that the 4.76% return actually makes us a profit. It doesn't. All it does is save a small part of our nest eggs from future inflation. That's not quite the same thing. In the end, we will have paid for a stamp and we'll have a stamp. We won't be any better off. I'll take it though.
In fact, I wish the government sold forever groceries, forever gasoline, forever electricity, forever natural gas, forever healthcare, and forever property taxes. Unfortunately, their biggest offering seems to be forever debt. I wish I could say that I could avoid it, but I'm both a taxpayer and a holder of government TIPS and I-Bonds. I'm neck deep in the stuff. Sigh.
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
-
At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
16 hours ago
9 comments:
Stag,
For some reason, stamps make great fodder for ponzi schemes:
http://www.counterpunch.org/hudson12232008.html
Actually, take any far reaching arbitrage situation and add leverage and you have the potential for a ponzi scheme.
New subject. One thing working against Bernanke is that uncertainty increases risk premiums. The TALF skirts that problem though, as the fed is gauranteeing against losses. That worked out great for banks with housing (no-money down).
People that write free options go broke. Always! Maybe that IS the plan. Sigh.
mab,
Great link!
An economy either is in trouble or has lost its sense of balance when investors shy away from tangible capital formation in favor of buying postage stamps and similar collectibles. Unlike machinery and technology, stamps do not produce real goods and services. They have long since been printed and sold by the government, and will never be used actually to mail letters. However, stamps have shown themselves to be a great vehicle to attract savers who think that buying them can produce an exponential earnings growth – or more technically, “capital” gains, if we can stretch economic terminology far enough to call a stamp collection “capital.”
Fortunately, I do not expect exponential returns, nor do I expect to sell them to others for any kind of profit. Further, I will actually use them to mail the letters. Whew!
That being said, I do believe our economy is in trouble AND it has lost its balance as I shy away from tangible capital formation in favor of buying postage stamps and similar collectibles. When I say similar collectibles, I do not mean cabbage patch dolls. However, I might be willing to buy cabbage, if I liked cabbage much and I could figure out a way to keep it fresh that is, lol. Sigh.
Our economy is SO in trouble. I feel the need to constantly repeat myself.
mab,
One more thought.
Rare stamp auctioned for $260,000
http://dailycontributor.com/200903053744/rare-stamp-auctioned-for-260000/
Warwick and Warwick auctioneers had estimated that the 1918 “Inverted Jenny” would fetch £150,000 when it went under the hammer. But the stamp, with a picture of an aircraft mistakenly printed upside down, sold for £34,000 more than expected.
I really need to do an infomercial.
Rare stamps have sold for upwards of a quarter of a million dollars. That's why we are offering this once in a lifetime opportunity to own a genuine "USA FIRST-CLASS FOREVER" stamp at the unbelievably low price of just 5 cents.
JUST PAY SHIPPING AND PROCESSING!
Normally they'd retail for 42 cents and are guaranteed to rise in value 4.7% in just two months time. Our price to you is just 5 cents though. There's nothing normal about that!
JUST PAY SHIPPING AND PROCESSING!
That's not all. Call within the next 10 minutes and we'll double your order! That's right! Two stamps for just 5 cents!!
JUST PAY SEPARATE SHIPPING AND PROCESSING!
We also will be providing a guarantee that the stamp you receive is 100% approved by the government.
My time is somewhat important to me. I figure $9.95 for each stamp ought to cover processing.
I don't actually intend to charge for shipping though. I figure that nothing in my ad actually says that the stamp has to arrive on the inside of the envelope. Further, how else could I guarantee that the stamp would be approved by our government without actually testing each stamp first? If the letter arrives, then clearly the stamp was approved.
Cynics would argue that I claim that normally the stamps are guaranteed to rise in value by 4.7%. I stand by my claim. Normally one wouldn't expect to receive a licked stamp. I'll cover all that in the fine print of course, just to make sure there isn't any confusion on what I'm selling.
It's all a part of my selling expensive free lunches business model. You don't suppose I'm too late to the party, do you?
I'm neck deep in the stuff. Sigh.
No gold? No guns? well at least it sounds like you have groceries so I guess you won't starve Mark that's a plus.
Kevin
Kevin,
In 2004, bought gold, bought gun.
In 2006, sold gold, kept gun.
Heaven help us all if I ever have to use it. I could see someone make it past our 20 pound cat. The 55 pound dog too perhaps. But the 8 ounce parrot? No way. Even our dog respects that beak. It might have something to do with "Birdie" accidentally falling off the back of the couch and onto the dog's back though. No harm was done, other than making "Honey" slightly paranoid, which isn't necessarily a bad thing. First, being slightly paranoid is sure working for me these days! Second, she's a "bird dog" breed. It was therefore good that our bird asserted her authority.
Mark those birds are some mean creatures my daughters Cockatoo bit here on the lip resulting in a trip to the hospital some stitches and the whole bit. The only thing that bastard was afraid of was a flashlight, that would put the fear of God in him, His name was Charlie.
I still have all my gold I bought in 04, dumped about a 1/4 of my silver that I bought for less then 5 at 21.5, I'm still in both Hussman funds and both of the the prudent bear funds. I'm setting up a couple of more IRA's and moveing every thing I had in the 401k so right now I'm sitting in over 50% cash on total assetts until that gets done. I'll be moving that into Huss and prudent over the next few months once this is moved.
Kevin
Kevin,
Our parrot hasn't bitten me in a long time, which is actually pretty impressive considering I've been having to towel her this week in order to give her medication. She takes it all in stride.
That being said, she'd bite the dog and/or my girlfriend. She wouldn't even need a reason, lol. There are times when Birdie will tolerate my girlfriend picking her up, but it usually requires some serious sweet talking with the promise of a reward. The dog has yet to be bitten, but someday that wagging tail will get a surprise. There have been a few close calls, not that the dog noticed. The dog's too busy looking at the floor for food that the bird drops.
Stag,
Just in case you feel the urge to hoard cabbage:
http://en.wikipedia.org/wiki/Sauerkraut
I also have a recipe for a really strong homemade horseraddish. It's so strong that if you held a handful against someone's mouth and nose, they'd pass out - literally! Somehow I think that might come in handy if the Mad Max scenario comes to pass. And who knows, it might help whip that parrot into shape too. ;)
mab,
Maybe there's some sort of sauerkraut gene that the bird is picking up on that I don't seem to have. Maybe that's why she trusts me.
Sauerkraut and horseraddish have to be right up there towards the top of things I'd prefer not to eat.
Asking me to use these items for home defense would therefore be a bit like telling superman the merits of kryptonite, not that I'm a superman by any stretch of the imagination, lol.
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