Forever Stamps are like long dated call options. If we assume that they are always sold at a premium to spot, say 110% x 1st class postage spot price, then we can assume people only use the Forever Stamps when today's 1st class postage spot exceeds the price on the Forever Stamp they own (think of this as a strike price) ie when spot exceeds strike, people exercise Forever Stamps, converting them into 1st Class Postal service. We also can assume that each batch (ie same strike price) of Forever Stamps get exercised the moment they get in the money - eg the supply of 42c Forevers gets cleared out once spot jumps from 39c to 43c. There will be some 42c Forevers that will sit around in someone's drawer unused, but the quantity of those should be small. Note that unlike regular call options where you pay the strike price upon exercise, here, you prepay the strike. In effect, the PO is borrowing money from you at 1) 0% plus 2) the expected cost of providing the public with inflation protection. What do I mean by the above 2 terms? eg. If Batch #1 of Forevers is issued at 42c when spot 1st class is 39c, AND the next spot 1st class price 1 year from now is 44c, Then 1) the PO has borrowed 42c from you for 1 year at 0% 2) the cost of providing the public with inflation protection is 44c - 42c = 2c (ie 1st class postage sales 1 year from now will be cannibalized by the supply of Forevers, costing the PO 2c per Forever) In short, the PO borrowed 42c and paid 2c worth of interest after 1 year or 4.76%, more or less the 1 year US Treasury Rate. However, the PO can control both the size of the borrowing (through the size of the Forever Issuance), the maturity (through the timing of the price hike on the spot 1st class) and the cost of inflation protection ( by how much more to hike the price of 1st class postal service). This means that in addition to your call option, because you prepaid, you also bought a 42c bond from the PO where the lender can change the maturity and coupon at their whim and fancy. Using the above example: if the PO feels like it, it can issue the next 1st class stamps 2 year from now at 43c. This means it borrowed 42c from all the Forever subscribers for 2 years at a cost of 1c, or about 1.2% p.a. If the PO ever gets into a fix where it somehow issued too many Forevers and because of national inflation, is forced to hike the 1st class price ahead of schedule, it can always create a new uber 1st class postage, effectively demoting 1st class to 2nd class. You then get a devalued product. Easyriderr alluded to that earlier. So ... I wouldn't be a buyer of Forevers.