From Money Metals Exchange
Treasury Secretary in apparent breach of requirement to mint Silver Eagles in quantities “sufficient to meet public demand”
Washington, D.C. (August 26, 2022) – Rep. Alex Mooney (R-WV) is calling US Treasury Secretary Janet Yellen and US Mint Director Ventris Gibson about the “protracted production slowdown” in the Silver American Eagle bullion coin program that has caused “scarcity and dramatically higher market prices for.” this iconic silver coin compared to its peers worldwide.”
Many Americans have tried to hedge against high rates of inflation by purchasing hard assets such as gold and silver. Overall market demand for bullion coins, bars and round coins has risen to higher levels than in recent years, if not ever before.
Most forms of gold and silver bullion do not carry a large premium (aka “premium”) to the actual market value of the metal itself, allowing investors to acquire more bullion for every dollar invested.
However, as of 2020, this is no longer the case for the Silver American Eagle, which is why it has become known in some circles as “the most overvalued silver coin in the world”.
In an August 25 letter, Mooney cited 31 US Code § 5112(e), which states:
“the [Treasury] The Secretary mints and issues coins of grades and quantities sufficient in the Secretary’s opinion to meet public demand, which (1) have a diameter of 40.6 millimeters and a weight of 31.103 grams; (2) contain 0.999 fine silver; (3) have a design – (A) a symbol of liberty on the front; and (B) an eagle on the reverse.”
But, as Mooney pointed out, the US Mint has made only 11.6 million ounces of the silver bullion available to the public through July 2022 — barely half of what was shipped in the first seven months of previous years, when demand was similarly strong.
“This shortage in US coin production appears to have resulted in extremely high market-based premiums on Silver Eagles (up to 70% above silver melt value) – even when comparable items produced by other sovereign mints and private mints were unaffected by the shortages or historically high premiums,” Mooney wrote.
“The high costs resulting from the US Mint’s production shortage directly harm US citizens who seek to use US legal tender to protect their financial security from the effects of inflation.”
Rep. Mooney calls on Yellen and Gibson to provide answers to the following questions:
- Does the minister believe the Silver American Eagle coin will be produced in “qualities and quantities … sufficient to satisfy public demand”?
- Why is only one supplier currently allowed (or willing) to supply the US Mint with silver blanks for their Silver Eagle program?
- Given its legal mandate to make these coins available to the public on a large scale, why does the US Mint not have a policy of building a reserve of silver billets during periods of lower demand to provide a buffer for periods of higher demand?
- Has the US Mint studied the practices of other sovereign mints – such as the UK Royal Mint, Australia’s Perth Mint, the Austrian Mint or the Royal Canadian Mint – to learn from their relative success in meeting the high public demand for their own silver coins ? If so, what were the resulting findings or recommendations?
- What actions are currently being taken to address the Mint’s production issues (reportedly extending beyond the Silver American Eagle coin program) and when will the US Mint be able to resume its mandate to meet public demand?
“We are grateful that Rep. Mooney is seeking accountability for the chronic mismanagement that plagues the US Mint’s operations — and the resulting costs and frustrations it imposes on new silver investors as well as the precious metals industry generally,” said Stefan Gleason, President of the Sound Money Defense League; and Money Metals Exchange, a major US precious metals trader that was named Best Overall by Investopedia.
A copy of Rep. Mooney’s letter can be accessed here.
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