In 2007 the United States Postal Service did something no rational business should ever do.
It sold a product with no expiration date, at a fixed price, in unlimited quantities, and promised to honor it forever at whatever the price became later.
Not for a year. Not for a decade. Forever. The word is printed on the stamp.
Gif by patrickhosmer on Giphy
Think about what that actually is. You hand over 41 cents in 2007, and the agency owes you one letter delivered, at any point until the heat death of the sun, no matter what postage costs then.
That is not a stamp. That is a perpetual call option on the price of first class mail, sold for cash, with no strike adjustment and no cap.
And Americans figured this out immediately. Every time a rate increase is announced, people buy stamps in bulk like it is a commodity trade, because functionally it is one.
So the obvious conclusion is that USPS handed the public a free inflation hedge and got fleeced.
The obvious conclusion is wrong.
Because the Forever stamp solved a problem so expensive that giving away the hedge was the cheap option.
Let me show you what it was.