A Quick Market Newsletter

A short post tonight.  Here is a link to a useful free financial newsletter from Axiom Financial.  The format has remained the same for several years and provides a quick weekly update of market conditions.

http://www.axiomfinancial.com/market-watch

Image from Axiom Financial

Image from Axiom Financial

 

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US Postal Service to raise its Stamp Price on 27 Janurary 2013

The US Postal Service is raising their price on stamps this year, as they did about the same time one year ago.  There will surely be some griping here, however the postage price has roughly kept pace with inflation.  The price increase should be expected.  The chart below indicates that the postage stamp rate since August 15, 1971 has nearly matched inflation.

Date

Stamp Price

Inflation Base

Difference

15-Aug-71 8 8.0 0.0
2-Mar-74 10 9.7 0.3
31-Dec-75 13 10.6 2.4
29-May-78 15 12.9 2.1
22-Mar-81 18 18.0 0.0
1-Nov-81 20 18.0 2.0
17-Feb-85 22 21.3 0.8
3-Apr-88 25 23.4 1.6
3-Feb-91 29 26.9 2.1
1-Jan-95 32 30.1 1.9
10-Jan-99 33 32.9 0.1
7-Jan-01 34 35.0 -1.0
30-Jun-02 37 35.5 1.5
8-Jan-06 39 39.8 -0.8
14-May-07 41 41.0 0.0
12-May-08 42 42.5 -0.5
11-May-09 44 42.4 1.6
22-Jan-12 45 45.4 -0.4
27-Jan-13 46 46.2 -0.2

There was a reason that 15 August, 1971 was chosen as the date.  That is the date when then President Nixon signed the order to allow for the termination of exchanging dollars for gold.  This allowed the US dollar to then float in value, almost always in the inflationary direction.  This period provided for the most “apples to apples” comparison for monitoring stamp prices.

If you know you’ll need the stamps and won’t lose them, buy them right before January 27, 2013.  Since the “forever stamp” that is available today at the price of $0.45 will rise to $0.46 next week, $1 is made in short time on 100 stamps.  There is no sense in hoarding stamps for this purpose, but it is worth noting that the “forever stamp” will hold its value better than cash in the wallet.  The below chart shows the price increases of the US postage Stamp since 1971.

Stamp prices from USPS.gov, inflation data from usinflationcalculator.com

Stamp prices from USPS.gov, inflation data from usinflationcalculator.com

Time to Buy Gold?

Holding Gold CoinI had a conversation with a friend recently in which he told me he was going to buy some gold as a result of the declining dollar and political unrest.  The chat went further down the path of needing something in the case of collapse of our economy and our currency.  While gold has performed well as an asset class (it’s not an investment) in the past, I cautioned that the time to buy gold was 10-15 years ago when nobody cared about it.  Since then it has been sensationalized in the news and would not be a smart buy.  The “smart money” has already sold out of their gold or has kept some and is looking to add fuel to the irrationality that the market is showing towards some metal that doesn’t really do anything other than sit there.

I have always maintained that it is important to be a good steward of your own personal economy, since that’s the one thing that you yourself can control.  This is why fundamentally, I have a problem with holding gold based on most reasons, including news sensationalism and irrational panic.  Gold does nothing for you.  At least nothing like what true investments such as learning a new skill, buying some real estate or company stock, going to college or trade school, or even taking a vacation.  Our county was not built into the beacon of free markets, and wealth creation based on holding some yellow rocks, but instead on the principles of self improvement, ingenuity, and productivity.

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