The great stamp speculation of the late 1970s, which saw worldwide stamps at least double in price in less than five years, had a precursor in the mid 1960s. The European stamp speculations that were then the driving force in worldwide price increases had a basis in reality. After World War II, Europe was devastated. The economies of Germany and Italy were shattered, and the economic infrastructure of these countries destroyed. People first needed food, clothing, and shelter; providing this for themselves filled Europe’s time in the decade after the War. As the economies of Western Europe improved, collectors began to try to find the post-war issues that they had been unable to afford when they had come out. They looked mainly for the higher values of sets and Airmail denominations for use in the United States. Earlier stamps were also in short supply. Many fine stamp collections had been damaged or destroyed in the War, and in the post war period many fine collections had been sold to US stamp dealers for hard currency to maintain a basic quality of life. It is hard for us to realize today, where hardship means life without an unlimited cell phone plan, that many people in Germany, the Netherlands, and Italy were hungry most of time in the post-war period.
Italians never have collected stamps with the avidity of the Germans, but still have a long and strong philatelic tradition. In the early 1960s, it was the stamps of San Marino that began to move in price. Never particularly popular with Italian collectors, San Marino had issued a number of higher values in the immediate post-war period that the few people who bought up Italian area mint when they had come out had ignored. Prices soon rose, and in stamps (as in many investments) nothing creates increased scarcity like perceived scarcity. Prices of San Marino boomed. The philatelic geography effect began, and speculators moved to the stamps of Vatican City and then to Italy itself. Within a couple of years in the mid-1960s, prices of many sets had gone up ten or more times in price.This speculation was a foreshadowing of what was to happen ten years later with the stamps of Germany, the Netherlands, British Commonwealth, and the United States. Between 1975-1980, prices boomed again as perceived scarcity made buyers eager to jump in, and then the price rises became self-reinforcing. And, like with the 1960s Italian boom, the market came crashing back down when collectors realized that there was always more supply than there was cash. One of the great advantages of the Internet age is that it has made such rapid booms unlikely. Before the internet, the slow pipeline that existed in the stamp world between the time demand increased and supply could be offered to the market (because of slower mail, auction lead time dates, Linn’s ads lengthy deadlines) meant that far more philatelic value was stuck in the middle of the stream, not for sale, as the market moved. Today, a rise in price would be immediately noticeable, and hundreds, if not thousands of sellers would be online overnight offering their wares, dampening price increase driven demand with adequate supply. Price would still rise, but the rise would be more orderly and without the rapid later fall off that marked the 1960’s and 1970’s European speculation.