Bullion Demand Overwhelms US Mint
BULLION SUPPLY shortages are preventing the US Mint from keeping pace with demand for Silver and Gold Coins, a House subcommittee heard Thursday.
Witnesses told the House Committee on Financial Services Subcommittee on Domestic Monetary Policy and Technology that the Mint loses out on at least one third of potential sales because it cannot meet demand.
"The Mint has taken steps to address its supply difficulties by adding additional capacity, but it still struggles to meet demand, particularly for the Silver eagle Bullion coins," said Terence Hanlon, president of Gage Metals, a Dallas-based precious metals dealer.
Beth Deisher, editor of weekly coin collecting magazine Coin World, cited the two-thirds cut in production of .999 fine silver versions of the 2010 America the Beautiful quarter dollars as symptomatic of the problem.
"Despite the Mint's earlier announcements suggesting 100,000 of each of the five designs would be available to the market, five days before sales to the public were to begin, the Mint disclosed it would instead produce only 33,000," she said.
Deisher also highlighted the problem of bulk buyers distorting the market for Silver and Gold Coins.
"Some people are able to sit by their computer during business work hours and purchase in quantities, thereby shutting out others," she said. "Those who successfully obtain the coins race to eBay to sell them at exorbitant prices and high profits."
Subcommittee chairman Ron Paul, R-Texas, said the situation at the Mint is a "reflection of what we are doing to our money," in particular what he termed a "huge debasement of our currency".
Total demand for Silver – including non-investment demand such as jewelry and industrial – rose almost 15% last year, according to figures from GFMS, the leading metals research company.
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