Best of the Week
Most Popular
1.Gold Price Trend Forecast, Where are the Gold Traders? - Bob_Loukas
2.Stocks Bear Market of 2017 Begins? Shorting the Dow At its Peak! - Nadeem_Walayat
3.Betting on President Trump Leaving Office Early, Presidency End Date - Betfair Market - Nadeem_Walayat
4.Why Stock Market Analysts Will be Wrong About 2017 - Clif_Droke
5.Is This The Best Way For Investors To Play The Electric Car Boom - OilPrice_Com
6.Silver Price 2017 Trend Forecast Update - Video - Nadeem_Walayat
7.Gold Price Set For Very Bullish 2017, Trend Forecast - Austin_Galt
8.10 Things I learned From Meetings With Trump’s Transition Team - - John_Mauldin
9.How Investors Can Profit From Trumps Military Ambitions - OilPrice_Com
10.Channel 4 War on 'Fake News', Forgets Own Alt Reality Propaganda Broadcasting - Nadeem_Walayat
Last 7 days
Here’s Proof Rising Rates Are Good for Gold - 21st Feb 17
Gold and Silver Weekly Update - 21st Feb 17
US Dollar and Gold Battle of the Cycles - 21st Feb 17
NSA and CIA is the Enemy of the People - 21st Feb 17
Big Moves in the World Stock Markets - Big Bases - 21st Feb 17
Stock Market Uptrend Continues - 21st Feb 17
Brent Crude Oil Price Technical Update: Low Volatility Leads to High Volatility - 20th Feb 17
Trump’s Tax System Could Spark The Wave Of Self-Employment - 20th Feb 17
Here’s How to Stay Ahead of Machines and AI - 20th Feb 17
Warning Signs Of Instability In Russia - 20th Feb 17
Warning: This Energy Investment Could Wreak Havoc On Your Portfolio - 20th Feb 17
The Mother of All Financial Bubbles will be Unimaginably Destructive when it Bursts - 19th Feb 17
Gold’s Fundamentals Strengthen - 18th Feb 17
The Flynn Fiascom, the Trump Revolution Ends in a Whimper - 18th Feb 17
Not Nearly Enough Economic Growth To Keep Growing - 18th Feb 17
SPX Stocks Bull Market Continues to make New Highs - 18th Feb 17
China Disaster to Trigger Gold Run, Trump to Appoint 5 of 7 Fed Governors - 18th Feb 17
Gold Stock Volume Divergence - 17th Feb 17
Gold, Silver, US Dollar Cycles - 17th Feb 17
Inflation Spikes in 2017, Supporting Gold Prices Despite Increased Odds of March Rate Hike - 17th Feb 17
Roses Are Red... and So's Been EURUSD's Trend - 17th Feb 17
Gold Trade Note Sighted - 17th Feb 17
Gold Is Undervalued Say Leading Fund Managers - 17th Feb 17
NSA, CIA, FBI, Media Establishment 'Deep State' War Against Emerging 'Trump State' - 16th Feb 17
Silver, Gold Stocks and Remembering the Genius of Hunter S. Thompson - 16th Feb 17
Maps That Show The US’ Strategy In Asia-Pacific - 15th Feb 17
The Trump Stock Market Rally Is Just Getting Started! - 15th Feb 17
Tesco Crisis - Fake Prices, Brexit Inflation Tsunami to Send Food Prices Soaring 10% 2017 - 15th Feb 17
Stock Market Indexes Appear Ready to Roll Over - 15th Feb 17
Gold Bull Market? Or was 2016 Just a Gold Bug Mirage? - 15th Feb 17
Here’s How Germany Buys Time From China - 15th Feb 17
The Stock Trader’s Actionable Guide to Trump - 15th Feb 17
Trump A New Jacksonian Era? The Fourth Turning (2) - 14th Feb 17
Stock Market Yet Another Wall Street 'Witch's Brew' - 14th Feb 17
This Is Why You Don’t Own A Lot Of Stocks - 14th Feb 17
Proposed Tax Reforms Face Enormous Headwinds - 14th Feb 17

Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

Deflation Hits Direct Mail Industry

Economics / Deflation May 23, 2009 - 02:21 PM GMT

By: Mike_Shedlock

Economics

On May 1, 2009 the US Postal Service issued a Notice of Market-Dominant Price Adjustment.


The Postal Service proposes to implement a Standard Mail Volume Incentive
Pricing Program (also known as the “Summer Sale”). The current state of the economy has forced businesses, particularly Postal Service customers, to pull back on important investments necessary for ensuring their continued prosperity. The precipitous decline in the use of Standard Mail for marketing products and services is an illustrative example of the unwanted choices many postal customers have had to make because of the economy.

The Postal Service believes it can, and should, find ways to help its customers increase their use of mail during these challenging economic times. With this in mind, the Standard Mail Volume Incentive Pricing Program offers an incentive to mailers to improve above their expected performance during the summer months, which is typically a low-volume period for the Postal Service and its customers.

This “Summer Sale” incentive program not only is designed to increase mail volume, but the timing of the program will take advantage of the Postal Service’s current excess capacity to deliver additional volume at relatively low cost during the summer months.

Thoughts on the "Summer Sale"

In response to the USPS Summer Sale, my friend "GJ" writes:

Deflation is hitting the direct mail industry. I know because I own a company in the printing and mailing industry. Yesterday I received the attached with the note below from the direct mail association in my area.

The post office is looking to have a post sale this summer because volumes are down so dramatically. Nothing like this has ever happened in my over 20 year career. Of course some of this is occurring because of technology but the majority because of the business climate in America.

Our industry has an incredible over abundance of press and mailing equipment and prices are dropping like a rock. Most companies have already downsized and we are still have not hit bottom. From my experience I think our industry is going to have to be cut dramatically in size to again become profitable.

Direct Marketing Association Supports Rate Cuts

It should be no surprise that the DMA Supports USPS 'Summer Sale' in Comments To The Postal Regulatory Commission.

DMA supports the summer sale. As the Postal Service states, the Summer Sale Program will (1) improve Postal Service finances, (2) help finances of its customers, and (3) provide the Postal Service with some intangible benefits. Specifically,

· The Postal Service will realize between $38 million and $95 million net revenue with administrative costs less than $1 million.

· Rebates will provide Postal Service customers with the latitude to explore additional ways to use the mail.

So, the US government decides businesses are not mailing enough, cuts rates in response, taxpayers realize benefits between $38 million and $95 million, and the DMA happily mails on.

It sounds like the perfect free lunch. I assure you it won't be.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2009 Mike Shedlock, All Rights Reserved

Mike Shedlock Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife