Silver Update: Eagle Rationing

RationingBrotherJohnF returns with a public silver update discussing the US Mint’s authorized dealer rationing of Silver Eagles to begin 2014.
Is the rationing a sign of a silver shortage, or is the US Mint simply incompetent?
BrotherJohnF’s Silver Update: Eagle Rationing is below:

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  1. “Is there a shortage or is the mint incompetent”
    I don’t think the two have to be mutually exclusive and i don’t think in this case it is either.  The video hits the point that blanks and capacity to make more are limited.
    For those concerned about how to get silver eagles with reasonable premiums if this actually materializes into anything significant there are a couple options. the first will appeal to more here than the second, buy a low premium option (such as the bars listed here) the sell it off and buy the 1oz eagles when premiums have come back to reality.
    The other, use SLV the same way, not as attractive to many here, but useful in the short term for those who don’t want to, or don’t have the means to buy 100 oz at once.

    • This is/was Brother John F at his best.
      For the record—- at this time US Mint Silver Eagle Sales for January 2014 is listed at 4 Million 726 Thousand ounces.
      Substantially below January 2013′s sales number, but still higher than 2013′s monthly average sales.

    • Canadian Silver Maples are not at all difficult to get and make perfectly suitable replacements for ASEs.  They are also $.50 each lower in price most of the time.  Like ASEs, they contain a full oz. of silver.

    • And the maples are 4 9s…  I think they’re as good as they get, just don’t touch one with your bare hand unless you want it toning.

  2. The main battle plan all along was to deplete the excesability  of pms . By keeping the price down so mining it would be a major hard ship. and given enough time all the stock in inventory be used up. An to do this for what purpose you might ask? To create the problem so they can come into the pms market to solve the problem. What I mean here is this. I give 2 months an it will happen like this. The stock market crashes an takes the comex along with it. It is forced to default on its contracts. An this is the moment the governments been waiting since 2000 for this day to happen. They will come in an freeze the pms since nobody can bid on the metal any more.  And will keep it froze till there dirty deals are done. And they till the American people how the NWO is coming to there town. An then they will put a new price on pms say 10% to 15% of the average over what it cost to mine it. An to guarantee that price of course you have to sell to the U.S. government.

    • I also beleive that the gov’t will allow the PM markets to default. This will keep the PM prices locked in as there will not be a market maker. After all, the same crooks own all of the exchanges around the world. With the metals out of the way it is only a matter of time before all of the gov’ts of the world rob their people blind and a new world currency is put in place. I am not to sure that even us “stackers” are going to escape the rath of Satan and his minions.

    • @Sam520
      “I am not to sure that even us “stackers” are going to escape the rath of Satan and his minions.”
      Have faith, Sam.  If Satan was all that and a bag of chips, St. Michael would not have kicked his @$$ clear out of Heaven and all the way down to Hell.  We are on the side of The Light and we WILL overcome the combined forces of darkness.

    • Ed_B – I do have faith. Faith that God is telling us there will be a One World gov’t and currency. The Book says we win after Christ returns and that almost everyone is killed. 

    • @sam520
      Good to hear that you have faith.  It can get us through bad times like few other things.
      As to almost everyone getting killed… OK, everyone dies anyway; just a matter of when, where, who, and how.
      There’s wisdom in most religions.  I also believe that free will is a HUGE deal in the spiritual realm and that our Earthly fate really is in our hands, for better or for worse.  It is what we make of it, although there is a lot of influence placed on it by the actions of others.

  3. Well when you run the price down to below cost, it’s hard to find a fool that will sell it.
    ECON 101
    Maybe the mint should start pressing “Paper Eagles”.  Heck, 1 out of every 100 COMEX
    silver ounces are made of paper.
    Just saw your latest SRR over at UTUBE
    Did you say you were buying miners?  I was looking at the $HUI the other day and it’s been going up since Christmas.  Could be the prelude we’ve been waiting for.  You should get Eneloop AAA and Powerex AA rechargeable batteries, and use the solar to recharge.  That mylar blanket will attract bears, so make sure you carry plenty of honey.

    • Plenty of silver available, the actual production of blanks is the bottleneck.

    • @SilverHawk
      “Maybe the mint should start pressing “Paper Eagles”.  Heck, 1 out of every 100 COMEX silver ounces are made of paper.”
      LOL!  Or, maybe issue some Eagle Certificates… payable on demand, of course.  Trust us.  Would we lie?  Go ahead, demand some.  See where that gets you.  ;-)

      OK, so how hard is it to make more blanks? Something tells me, not very. More people, more stamping machines. That’s all. Just do it.

    • “Plenty of silver available, the actual production of blanks is the bottleneck.”

    • @Ed_B
      Not just stamping machines, but refining, etc to turn either less pure metal or large bars to 1oz blanks.  The article they showed in the video mentions it.  I don’t think it is as easy as just bulding a press, has to a be a remarkably low margin business most of the time, so the decision to expand is probably not as easy as let’s just build a new machine.

    • Sorry, Mike, but coming from an industrial background where GET IT DONE is the daily mantra, it is hard for me to think that those who are in this business could not GET IT DONE, if they so choose.  Obviously, they are not choosing to do this for whatever reason.  You could be right about those reasons.  But let’s also look at the law that requires the US Mint to produce both gold and silver coins in amounts that meet the public demand.  What part of “requires” are they not getting?  Hopefully, they will not opt to have the blanks made in China.  No telling what might be in those.  :-O

    • @Ed_B
      We’ll have to agree to disagree on this one, i was simply interpreting what i heard on the video from Tom Power running sunshine who most of us know are making blanks (and are expanding that capacity, but accessing that capacity isn’t just flipping a switch).

      “I’ve seen the ups and downs, the strong cycles and the weak cycles, so you’re always cautious about how much you invest in capital to meet a push
      in demand. You ask yourself: “Is this a temporary thing?””

      Also limiting, don’t eagles require US silver or am I mistakenly pulling that tidbit from the wrong corner of the brain?

      As far as the government dodging the law… unfortunately that does not surprise me.

      I too am in a business where you need to get it done (agriculture). I look at the ethanol boom as a similar phenomenon, from relatively little demand it becomes over run. There was money to be made if you could get a plant built yesterday, less money in the future. Many pushed forward, one company, verasun, decided to buy 3 producing plants rather than build. A good thought until they unhedged all their corn purchases near $8 and failed to sell enough ethanol to offset. You can look up what happened to them, just don’t expect to find their company website.

      So is the boom in average joe investment in silver here to stay? I think most here think yes, but if you are going to put millions of your own money into a production facility, you probably want to have reasonable assurance you will get it back with a multiple.

    • @Ed_B
      Curiosity got the best of me, nothing about us silver requirements other than the program was originally to sell off the strategic silver stockpile without further depressing price… learn something new every day.

      Also the law is a bit dodgy about “sufficient to meet demand”

      (e) Notwithstanding any other provision of law, the Secretary shall mint and issue, in qualities and quantities that the Secretary determines are sufficient to meet public demand, coins which—
      (1) are 40.6 millimeters in diameter and weigh 31.103 grams;
      (2) contain .999 fine silver;
      (3) have a design—
      (A) symbolic of Liberty on the obverse side; and
      (B) of an eagle on the reverse side;
      (4) have inscriptions of the year of minting or issuance, and the words “Liberty”, “In God We Trust”, “United States of America”, “1 Oz. Fine Silver”, “E Pluribus Unum”, and “One Dollar”; and
      (5) have reeded edges.

    • @mikeyj80
      “… but accessing that capacity isn’t just flipping a switch.”
      Your words, not mine.  I KNOW that it would be difficult but also think that it is not insurmountable.  It CAN be done, it just isn’t.  Big difference in those two positions.  Besides, what industrial company in its right mind would slave its output to ANY ONE supplier of a critical component?  None, unless they have NO other choice.  Gubmint ops, OTOH, can be pretty slipshod at times… in fact, at most times.  So, why can’t other silver smelters also supply the US Mint with blanks?  One would think that they would spread this around as fully as possible.
      As to risking capital, yes, that is a BIG problem.  But US Mint contracts for X amount of blanks per year would go a long way towards fixing that.
       ”Also limiting, don’t eagles require US silver or am I mistakenly pulling that tidbit from the wrong corner of the brain?”
      I seem to remember that as well but, as with your quote about the Secretary, they obviously have built some wiggle room into this.  Of course, ignoring the law is not a new thing.  If it isn’t convenient, they somehow seem to let it slip and the mutts in the US Just US Dept. don’t seem to worry about it.  By your comment, are you implying that all US silver production is being bought up to produce ASEs or am I reading that into it?
      Much of this is moot, however, as there are other national mints that crank out lots of 1-oz. pure silver coins.  As long as one is not dedicated only to ASEs, there are multiple choices to be had.

    • I may have been trying to be too verbose, by accessing i meant building new capacity.  sunshine is adding, but you dont wake up one morning and say ‘i want more capacity’ and then have it available tomorrow.
      I do agree it makes all kinds of sense to hedge your bets with both suppliers and buyers.

  4. @mikeyj80
    simply ridiculous to scapegoat a shortage in blanks…the Mint is not the only customer for the blank makers but the mint can simply outbid the other customers to ensure it’s demand is fulfilled prior to other customers…the mint can pass on the higher charges in the coins.  Or, the Mint can purchase or lease auxiliary machinery to fill in the shortages.  Again, any additional costs can be passed on through the coins.  This is not hard or difficult to resolve…if the Mint cared to resolve it.

    Makes one wonder if there supposedly is no shortage in silver supply, excess demand for the Mint’s product and all that has stood between an equalization for five years now is a couple million dollars in capital expenditures (that apparently run non-stop)…why oh why would folks not take this risk??? The Mint could even buy the machinery and have it run @ one of the blank makers to ensure there is never a shortage. Why oh why would something so fundamental and ridiculous be pointed to as the barrier.

    Christ, here’s a link to help the mint buy the machinery (as if they don’t know since they make all the blanks needed for all the coins in circulation in the US)…how fucking ridiculous their propaganda has become.

    • @Hambone
      Why don’t you help them out and send them this link?
      When you have limited supply of something, you don’t just cut off all your customers to service one.  
      If there is a shortage of silver why do we see sunshine rounds still offered at 79c premium?

    • @Hambone
      Did you watch the video?  Around the 8minute mark is where i pulled my theory.

  5. You have to be out of your friggin’ mind to be buying ASE at any premium over Maples. Or to buy ASE at all.

    And getting lower premium silver now to buy ASE later??? Way to destroy wealth!
    Are you guys seriously lining up to give up 10-15% of your ounces for an arguable butt-ugly coin, with the highest mintage in the world, attached to the treasury of the most hated nation on the globe? Even if you live in it…smarten up!!
    The US Mint is doing y’all a favor by forcing you to buy smarter silver.
    How can thousands of stackers be wise enough to buy phyzz and then be SO stupid as to destroy their wealth into buying ASE which basically constitutes TAX, when there are better option available?
    Don’t hold your breath for 2014 Eagles to receive any collector’s premium. 30+ million will be minted surely.
    Much better to spend such money on private rounds, many different kind, with limited mintages. Zombucks are fun. Various other and cheaper options out there. Wait a few year, and cash in that premiu, but even more silver.
    Example: Provident’s Year of the Horse round. Less than $1 over spot. Obviously a year-specific design. Gets some of these, and in a few years you can quietly sell them at a premium to whichever bullion is then cheap(est).
    I’m doing this with semi-numi coins that cost around the same as Eagles, and making a killing. Sold a tube of 2012 Elephants today. Paid €26,50/ea in may 2012 (€1 over Maples). Sold well within 2 year for €29/ea (€12 over Maples). Today 2014 Elephants or Koala’ are €19 or so. And…repeat!
    Actually this 2012 coin was a BJF tip. I doubt he’s selling his though, just sitting on them thinking he’s richer. But you only have premium on coins if you can cash it, and successfully get back into silver. One such tube can cover the premium paid for several others, should I never manage to sell them and have to dump them at melt.
    Only when silver get too toppy I will stop buying semi-numi back altogether. Now that premiums are too high for my liking, I am getting back Philharmonikers, Maples and (hard to get in Europe) US private rounds. I will keep on flipping semi-numi coins until it feels like time to get ounces above anything else. And when premium of semi-numis fall away completely, what do I do? I trade my Maples for semi-numi to protect against drop in silver, in case I don’t sell all for melt.

    Moral of the story : you ASE pushers/buyers are friggin’ NUTS. I own like two, to sell to newby stackers who want one. Will be happy when they’re gone.

  6. XC Skater, your point on flipping semi-numi coins is appreciated.  Thanks for sharing your non America-centric viewpoint, but keep in mind yours is just one perspective of ASE’s, and there are others which are also valid.  And I flatly disagree it is a ‘butt-ugly’ coin.  The obverse is arguable one of the most beautiful American coin designs, and I am looking forward to whatever the US Mint will do to commemorate the 100th anniversary of Weimann’s design in 2016.
    As a very recognizable coin – there will always be folks wanting to buy an ASE, and this is what I keep in mind when purchasing them.  Compare these to ‘private mint rounds & bars, which the person whom you are selling to may not be familiar with; thus I avoid most of these, although I am a fan of the Zombucks.
    And then there ia American ‘junk-silver…’

    • Why not stick to American junk? It’s just as well an end-of-the-line investment. Will never bring you ounce profits.
      Some older Eagles may be selling for a few bucks premium, but those were not minted like today’s.
      When silver becomes a big deal, the catalogues will come out and every coin will be recognizable. Actually counterfeit is a serious issue with well-known designs.
      I diversify my stack greatly, as my vision is that it’ll be a long wait until it’s time to exit silver. Until then, I am flipping. And loving it.
      One can’t flip 5 tubes of Elephants easily, but if I have multiple years, and mix it up with rolls of Koala’s, tube sof Zombucks, etc, it will be easy to sell and get my premium. With 5 tubes of Eagles, you’re going to have to undercut market prices to get a sell, and it may not even be quick.
      One slight advantage for the ASE is that there’s no queen on it. But it makes up for that with outdated promises which have since become a joke ;-)

    • Don’t forget the libertads, people seem to love those coins.  The fiji takus are pretty coins as well and relatively small mintages for now.

    • Yup, I just sold 2 (little) Libertads today. Someone had a set to complete. Once I had the kg, and it was gone way too soon.
      Libertads are Eagle, but pretty, and come in nice sizes. Get them ONLY when the premium is right. but that goes for everything pretty much, unless you know you can flip short term.
      Taku’s are great coins, but they don’t seem to sell as well as they should. Right now the premiums are sky high, awaiting the 2014 edition I suppose, and no great stocks. Especially the 5oz, although a bit undersized, is really nice.

      Right now the semi-premium coins to get, IMO, are the Perth Lunar II Horse privy and the 5oz Horse. You KNOW the Horse is going to be popular the coming years. I have a bunch of 5oz Snakes and already in 2013 sold them at a really nice premium.
      I have no logic to it, but with silver near bottoms I like buying 10oz and kilo coins more than otherwise. I tried getting the Horses, but the dealer ran out long-term and I got the (usually pricier) Elephants in stead. 
      Last year the 10oz Snakes did crazy well, once the Horses are back I’ll need to stock up somehow. Being all-in, and rising bills and costs, seems harder to buy the bigger coins. But by the end of the year all at once they’ll dry up, and premium rise. Example : 10oz should all be around the same price, give or take €1. Right now the new ones are about €176. The 2013 are : Noah €176 (BUY), Kookaburra €193, Snake €232, Koala €249. This is a very large price comparison site in Germany. It’s extra good/bad due to the total stock clearance they underwent in the old year due to tax (evasion) reasons.
      BTW 10oz Horse is totally off the screens there. Like it’s yet to be debuted, but it was here last year already.

    • Reading the law on eagles… why not change the reverse every year, a new eagle?  The current one is awful as you mention, and would make them slightly more collectable, though mintage numbers are still huge.

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