Well, the current fiasco over the physical shortage symptoms surely isnt quieting down, if anything its getting more gas poured on daily as more and more analysts weigh in on the situation.
I was just reading one such article on Seeking Alpha, and ran across a rather excellent and well put comment:
Actually, the U.S. Mint has not just “run out of blanks” as Bron suggests.
Bron says that Perth Mint is not having trouble getting adequate supply. But, remember, the U.S. Mint is several orders of magnitude bigger than the Perth Mint. Its coin production many times larger than any other mint in the world. It needs a level of supply that the Perth Mint couldn’t even dream of. And, it doesn’t have any “unallocated storage” schemes with which it might have metal, it now is using, stored up from long ago, when availability of physical metal was higher.
The U.S. Mint’s daily needs, in light of the doubling and quadrupling of its bullion coin production is, apparently, too much silver and gold for the real market to supply. If there is market manipulation going on, I am sure that the manipulators would have wanted to supply the U.S. Mint. Certainly, the public relations fiasco, and the possibility that this type of overt proof of supply/demand manipulation, might cause some state to intensely investigate, and seek jail time for some of them, should have been enough to make sure the Mint was supplied. But, apparently, there isn’t enough available gold and silver, in the world, right now, to supply both the U.S. Mint and the Indian weddings demand that is about to happen. This implies a very severe shortage of gold and silver, probably also inside national gold hoards, whose physical supplies of gold, some say, has been largely replaced by IOUs. Could the real level of gold swaps and IOUs been seriously underestimated by guys like James Turk and the boys at GATA?
Anyway, the U.S. Mint wrote back to the Silver Institute, when questioned about their rationing of silver coins, admitting that they cannot source enough silver. They claimed that the reason is that they are forced, by law, to source silver from American mines, only. Numerous commentators have researched the law, and found that the American sourcing rule applies only to gold, not silver. It is an ancient piece of pork for U.S. gold producers, from back when gold prices were in the doghouse. So, the Mint was not telling the complete truth, for its own reasons.
The June letter, from the Mint, stated:
“…By law, the United States Mint’s American Eagle silver bullion coins must meet exacting specifications and must be composed of newly mined silver acquired from domestic sources. The United States Mint will continue to make every effort to increase its acquisition of silver bullion blanks that meet these specifications and requirements to address continuing high demand in the silver bullion coin market…”
Have to say, this guy makes alot of sense.
Original Seeking Alpha article here
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