Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
Palladium Shortages Expose Broken Futures Markets for Precious Metals - 9th Dec 18
Is an Inverted Yield Curve Bullish for Gold? - 9th Dec 18
Rising US Home Prices and Falling Sales - 8th Dec 18
Choosing Who the Autonomous Car Should Kill - 8th Dec 18
Stocks Selloff Boosting Gold - 8th Dec 18
Will Weak US Dollar Save Gold? - 7th Dec 18
This Is the End of Trump’s Economic Sugar High - 7th Dec 18
US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - 7th Dec 18
The Secret Weapon for Getting America 5G Ready - 7th Dec 18
These Oil Stocks Are a Ticking Time Bomb - 7th Dec 18
How Theresa May Put Britain on the Path Towards BrExit Civil War - 7th Dec 18
How easy is it to find a job in the UK iGaming industry? - 6th Dec 18
Curry's vs Jessops - Buying an Olympus TG-5 Tough Camera - 5th Dec 18
Yield Curve Harbinger of Stock Market Doom - 5th Dec 18
Stock Market Crashed While the Yield Curve Inverted - 5th Dec 18
Global Economic Outlook after Trump-Xi Trade War Timeout - 5th Dec 18
Stock Market Dow Plunge Following Fake US - China Trade War Truce - 5th Dec 18
Subverting BREXIT - British People vs Parliament Risks Revolution - 5th Dec 18
Profit from the Global Cannabis Boom by Investing in the Beverage Industry - 4th Dec 18
MP's Vote UK Government Behaving like a Dictatorship, in Contempt of Parliament - 4th Dec 18
Isn't It Amazing How The Fed Controls The Stock Market? - 4th Dec 18
Best Christmas LED String and Projector Lights for 2018 - Review - 4th Dec 18
The "Special 38" Markets You Should Trade ebook - 4th Dec 18
Subverting BrExit - AG Confirms May Backstop Deal Means UK Can NEVER LEAVE the EU! - 3rd Dec 18
The Bottled Water Bamboozle - 3rd Dec 18
Crude Oil After November’s Declines - 3rd Dec 18
Global Economic Perceptions Are Shifting - Asia China Markets Risks - 3rd Dec 18
Weekly Charts and Update on Equity Markets, FX Trades and Commodities - 3rd Dec 18
TICK TOCK, Counting Down to the Next Recession - 3rd Dec 18
Stock Market Key (Short-term) Support Holds - 3rd Dec 18
Stocks Bull Market Tops Are a Process - 3rd Dec 18
More Late-cycle Signs for the Stock Market and What’s Next - 3rd Dec 18
A Post-Powell View of USD, S&P 500 and Gold - 2nd Dec 18
Elliott Wave: SPX Decision Time Is Coming Soon - 2nd Dec 18
Junior Gold Stocks Q3’18 Fundamentals - 1st Dec 18
Little-Known BDC Stocks Thrive Amid Rising Rates and Earn Investors +7% Yields - 1st Dec 18
Ray Dalio: This Debt Cycle Will End Soon - 1st Dec 18
Bank of England Warns UK House Prices 30% BrExit Crash! - 1st Dec 18
Gold Fundamentals Improving but Not Bullish Yet - 30th Nov 18
What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - 30th Nov 18
Global Economic Perceptions Are Shifting Imnplications for Stock Market - 30th Nov 18
The US Economy is Getting Worse. What this Means for Stocks - 30th Nov 18
Trailblazers Leading the Way in Online Reputation Management - 30th Nov 18
The Shift in Trend from Physical Printers to Online Printers - 30th Nov 18
UK House Prices 2019 No Deal BrExit 30% Crash Warning! - 30th Nov 18
Stocks Rallied, New Uptrend? - 29th Nov 18
The Fed Will Probably Stop Hiking Rates in 2019. What’s Next for Stocks - 29th Nov 18
Love. Fear. Inflation. A Precious Metals' Trifecta - 29th Nov 18
GBP/USD – Double Bottom or Further Declines? - 29th Nov 18
Stock Market Santa Rally Still a GO to Dow 27,000? - 29th Nov 18
UK Government and Bank of England BrExit Economic Armageddon Propaganda - 29th Nov 18
Why the Crude Oil Price Collapsed to $50 - 28th Nov 18
Gold Joins the Decline – the Earth is Shaking - 28th Nov 18
Watch This Picture As Asset Prices Fall - 28th Nov 18
GE’s Stock Price Crash Holds an Important Lesson About Investing - 28th Nov 18
5 Rules for Successful Trading - 28th Nov 18
Dollar Trend Imposes: EURUSD to Fall to 1.11 - 28th Nov 18
Gold, Original Money, Fiat Money - 28th Nov 18
When Will the Stocks Bull Market End? - 28th Nov 18
Looking ahead: Why the Smart Money is Investing in Green Energy - 28th Nov 18
The Yield Curve Will Invert Soon. What’s Next for the Stock Market - 27th Nov 18
Silver Trading and the Hands of a Broken Clock - 27th Nov 18
What's Inside SMIGGLE Christmas Advent Calender 2018 - 27th Nov 18
Investing in Recession Proof Trailer Parks - 27th Nov 18
The Advantages and Disadvantages of Debt Consolidation - 27th Nov 18
GDX, This Most-Hated Stock Could Return You 140% in Just a Few Months - 27th Nov 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

US Mint Running Out of Silver (and Excuses)

Commodities / Gold and Silver 2010 Sep 09, 2010 - 04:51 AM GMT

By: Tarek_Saab

Commodities

Best Financial Markets Analysis ArticleIn Title 31 of the US Code, the United States Mint is required by law to supply "in quantities sufficient to meet public demand, one dollar silver bullion coins of specified size, weight, and design." (Source) This law is widely referenced, and I have criticized the US Mint in the past when it fails to meet consumer demand because of poor planning, despite the availability of silver.


DOMESTIC SILVER SUPPLY

However, there is an incredible amount of confusion about a second law which allegedly states that the US Mint must supply its silver "blanks" from domestic resources. At present, two of these resources are the Sunshine Mint and Stern-Leach. On June 5th, 2008, during the first massive Silver Eagle shortage, the director of the US Mint published the following statement:

"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." (Source)

This interpretation of the law is extremely relevant because Silver American Eagle sales are now on the verge of surpassing total domestic silver mine production.

*2010 data assumes flat domestic silver production from 2009 YoY. Silver Eagles sales figures are linear estimates based on 23.6M coins sold through August 2010, with no market assumptions. Sources Silver Production: USGS.gov Silver Eagle Sales: USMINT.gov

WHAT DOES THE LAW ACTUALLY SAY?

However, many contend that the 'domestic supply' law doesn't actually exist for silver, but has been confused with a different law on the books for gold, PUBLIC LAW 99-185—DEC. 17, 1985 99 STAT. 1179.

“(4) The Secretary shall acquire gold for the coins issued under section 5112(i) of this title by purchase of gold mined from natural deposits in the United States, or in a territory or possession of the United States, within one year after the month in which the ore from which it is derived was mined."

There is no mention of silver in this law. In fact, the only mention we found for silver supply chain requirements comes from Title 31 U.S.C. § 5112 : US Code - Section 5112: Denominations, specifications, and design of coins:

"(C) Sources of bullion. - The Secretary shall obtain silver for minting coins under subparagraph (B) from available resources, including stockpiles established under the Strategic and Critical Materials Stock Piling Act."

With respect to the law on the books for gold, the phrase "available resources" is somewhat ambiguous. Are there any qualifiers to an "available resource"?

This ambiguity is so serious that in 2002 Representative Frank Lucas of Oklahoma proposed the Silver Eagle Coin Continuation Act of 2002 (H.R. 4846) to the House of Representatives "to amend title 31, United States Code, to clarify the sources of silver for bullion coins, and for other purposes."

On June 25, 2002, this bill passed the house by a count of 417 Ayes to 1 No (16 Abstain) and moved onto the Senate as S. 2594 [107th]: Support of American Eagle Silver Bullion Program Act.

However, the Senate referred this legislation to the Committee on Banking, Housing, and Urban Affairs, where it has since remained, and has never been signed into law.

So where does that leave the situation? It apparently leaves us with an ambiguous law that is open to interpretation by the only party with the authority to make one - the Treasury Department.

We will discover the ramifications soon enough. If the United States Mint decides not to source in the open market or tap into strategic reserves, the data would indicate that there will be extreme domestic shortages. If they do decide to source from the open market, well, who knows? . . . What happens when the US Mint begins buying physical bullion on the open market?

'Til next time, that's my Saab Story.

By Tarek Saab

Website: trustedbullion.com E-mail: tarek@trustedbullion.com

Tarek Saab is an entrepreneur, speaker, and nationally syndicated author. He is the founder of Saab & Company Inc., which owned the online bullion business, Guardian Commodities, before it was acquired by Trusted Bullion in August 2010. An avid precious metals enthusiast, his column, Saab Stories, is published on this site and syndicated on many others.

Tarek rose to fame as a popular contestant on Season Five of The Apprentice with Donald Trump.  He has been prominently featured in such magazines as Us Weekly, TV Guide, People, Enigma, In Touch Weekly, The Dallas Business Journal, The Fort Worth Business Journal, Digital Gold Currency Magazine, The Mensa Bulletin and numerous other print and online publications.

© 2010 Copyright Tarek Saab - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 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

6 Critical Money Making Rules