“Bullion demand still at unprecedented levels.” Yes, demand from the U.S. Mint (and every other mint and refiner) was very strong going into April. We all know what happened then and have watched as global demand has soared because the “price was too low.” Of course, if you listen to Bloomberg or CNBC they will tell you that gold has been sold off because it’s “just not safe anymore.” It’s in a bear market, only barbarians would invest in it and the smart money has already panicked out…as should you too.
But here is a quote from acting director of the U.S. Mint, Richard Peterson:
Demand right now is unprecedented. We are buying all the coin (blanks) they can make.
–Reuters.com, June 5, 2013
Hold on now…let’s take a look at this quote a little closer. “We are buying all the coin blanks they can make?” Really? So if they are buying every blank that can get their hands on…then why have there been shortages this year? Why has the mint had to suspend sales several times? “Buying every blank that they could get their hands on”…Was apparently not enough?
Actually, a better question would be, “If demand is so great and the U.S. Mint is buying every single blank that they can, then how is it possible that the price went down? Not just down mind you, down as in a ‘panic “down?” I’d like to remind you (and preface what I am about to say) that the “law” here in the U.S. is that the mint MUST buy as much silver and as much gold as necessary to meet demand and this supply must come from U.S. mines. Now, I seem to remember that for the first quarter alone, the mint sold as many (I think actually 1,000 ounces more) Silver Eagles as all tallied silver production that came out of the ground from U.S. mines. So in plain English, the mint sold more Eagles than the mines produced metal in the 1st quarter.
Now, not to disparage Americans but the Chinese and Indian population make us look like absolute “pikers” when it comes to buying gold and silver. In fact, it looks like China and India are so far this year (and we don’t even have numbers yet for April or May when the demand really exploded) likely to consume MORE THAN 80% of the entire world’s production, where is the metal coming from? COMEX? LBMA? Ah yes, GLD! I would say as an off the cuff comment, once the “bleeding” stops and GLD doesn’t report much more in the way of “deliveries” the barrel will be dry. I say this because once the deliveries stop, my guess is that what they have left in “inventory” will be of the “flammable” type. “Gold” as in receipts and paper promises.
As I wrote yesterday, “If you are truly listening” you can hear what they are telling you. Here is the director of the U.S. Mint telling you that they cannot buy enough blanks to keep up with demand. This tells you a couple of things.
1. Supply and demand are out of balance.
2. It also should tell you that IF you can get your hands on what is of short supply…you are getting it at a price that the market deems to be too low.
LISTEN and analyze what is coming out of the “official mouths” all over the world, if you listen carefully, they are telling you the truth to cover their sorry butts when this thing blows up. Like I said yesterday, they will throw their arms up in the air and say, “We tried to tell you.”
There are no shortages. The mint is not offering enough for blanks, and they are not charging enough for finished coins.
They need to allow their prices to rise, in order to find equilibrium with demand.
All blanks are not created equal. The Silver Eagle has a special silver alloy including a specifies amount of Coppar. This meand the approved suppliers to the US Mint must decide how much to make and I can see it could easily be bottlenecks other than raw silver to fulfill suddenly increasingly bigger orders. Note: I also believe we are (soon) going to see bigger shortages in silver. But this in not that…
I don’t think so, Eagles are 99.9% pure Silver. Yes, bottlenecks are occurring because the refiners cannot keep up due to very high demand…high demand flies in the face of crashing prices.
Here is what I have read in many places about The Silver Eagle.
Mint: Philadelphia, San Francisco, and West Point
Weight: 31.101 grams
Composition: 99.93% silver, 0.07% copper
Diameter: 40.6 mm
Thickness: 2.98 mm
as I said…99.9%+ Silver. So why bottlenecks? Because of the .07% copper? I call bullshit…which is what I do for a living.
the law that ASEs must be minted from US silver was changed a few years ago. can de sourced from wherever now. this was due to the increased demand for silver products. also supply of coins can be limited by the treasury.
Shortages or not I’m going to stack until the Fed stops printing 85 billion a month, which I don’t think they can.
Ever notice how strong the Muslins feel about their good book?
Well, I feel the same way about my Bible and in the Bible the only real money is gold and silver.
The only time Jesus got very upset was when he threw the money changers (aka bankers) out of the timple.
You can store your wealth in man’s paper system if you wish, but I’m staying with God’s money which is silver and gold.
“Gold & Silver, money of the Gods!”
Yeah, I like it!
Paper money has discredited itself, what more should be said?
What’s left? commodities since they cant be “printed” are needed to “run the world”: world cannot exist without commodies; can exist without “paper money/fiat” so what does common sense say.
Who is causing all of the problems? day traders of course; their profit depends on day trading, not long term. Long term does not exist for them, and naturally their computers of course!
Your firm is an anomaly “in the business” its honest!
Iapplaud the founder, he proved conclusively that “honesty is the best policy” an unheard proclamation “in the business” –
David and his son are remarkable “human beings” that includes Andy and the others also.
Thanks for the kind words.
I just read earlier in the morning:
THINGS ARE SLEDOM WHAT THEY SEEM – SKIM MILK MASQUERADES AS CREAM. (R&H)
Yes, good one! …and as my Dad used to tell me, “the cream rises to the top”!