Pages

9.05.2010

Silver Eagles And The U.S. Mint

This is just a background on the American Silver Eagle Bullion Coin, and a recent (fairly unpublicised) event  that some of you might be unaware of.  


Effect of recession on availability, 2008–2010
As a result of the ongoing global recession, the demand from investors for precious metals as a hedge against inflation and economic downturn has surged. This increased demand began to affect the availability of American Silver Eagle bullion coins in February 2008 when sales to authorized dealers were suspended temporarily. In March 2008, sales increased nine fold from the month before (from 200,000 to 1,855,000).In April 2008, the United States Mint began an allocation program, effectively rationing Silver Eagle bullion coins to authorized dealers on a weekly basis due to "unprecedented demand. At least one observer has questioned the legality of the allocation program, as the Treasurer of the United States is required by law (31 U.S.C. § 5112(e) to mint and issue these coins "in quantities sufficient to meet public demand." On June 6, 2008, the Mint announced that all incoming silver planchets were being used to produce only bullion issues of the Silver Eagle and not proof or uncirculated collectible issues. The 2008 Proof Silver Eagle became unavailable for purchase from the United States Mint in August 2008 and the 2008 Uncirculated Silver Eagle sold out in January 2009 (however, it was available as part of the "2008 Annual Uncirculated Dollar Coin Set" until it sold out on January 28, 2010).

On March 5, 2009, the United States Mint announced that the proof and uncirculated versions of the Silver Eagle coin for that year were temporarily suspended due to continuing high demand for the bullion version. The allocation program that had been put in place in March 2008 was lifted on June 15, 2009, leading to speculation that proof and uncirculated versions might be produced before the end of the year. However, on October 6, 2009, the Mint announced that the collectible versions of the Silver Eagle coin would not be produced for 2009.

The disappointment of collectors was expressed in a December 1 article by Representative Gary C. Peters (D-Wisconsin). Peters offered alternative scenarios to the cancellation of 2009 proof and uncirculated Silver Eagles and explained that he would be sending a letter to Mint Director Edmund C. Moy urging him to begin minting these products as soon as possible and continuing to do so until the end of the year. This effort was not successful and the collectible versions were not produced. The sale of 2009 Silver Eagle bullion coins was suspended from November 24 to December 6 and the allocation program was re-instituted on December 7; the product sold out on January 12, 2010.
Production of the 2010 Silver Eagle bullion coins began in January of that year (as opposed to beginning typically in December preceding the year of issue) and the coins are being distributed to authorized dealers under an allocation program. As of July 21, 2010, it is not known if proof and uncirculated versions of the American Silver Eagle coin will be produced again, however Edmund C. Moy, Director of the United States Mint, explains in the Mint's annual report for fiscal year 2009 that the Mint "hope[s] to resume some American Eagle and American Buffalo numismatic product sales in FY 2010. (Fiscal year 2010 ends September 30, 2010.) On July 20, 2010, Moy provided testimony to the House Subcommittee on Domestic Monetary Policy and Technology on the matter of proof and uncirculated Silver Eagle coins, referencing the possibility of a legislative solution. Moy explained:

... Because we could not produce these popular coin products, those who had become accustomed to purchasing them on an annual basis were very disappointed. As Director of the United States Mint, I appreciate the disappointment of these collectors, but I am encouraged to know that the Subcommittee is exploring the possibility of an amendment to the law that would afford the Secretary the authority to approve the minting and issuance of American Eagle Silver Proof and Uncirculated Coins even when we are unable to meet the public demand for the bullion versions of these coins. American Eagle coin collectors and our many other customers who purchase these products as gifts would likely welcome such a change. Indeed, such a change would be one of the most positive customer satisfaction measures that could be taken to benefit your coin collecting constituents without having an effect on American's [sic] ability to acquire investment-grade silver bullion. We have already provided you technical drafting assistance that your staff have requested to accomplish this change; however, such a change needs to be enacted soon. We can mint 200,000 per month, and if we can begin by September, we will be able to produce about 830,000 one-ounce silver American Eagle coins to meet collector demand for this product in the remaining months of 2010.


I know that quite a few of my blog readers have only recently become interested in the purchase of Silver and Gold Bullion coins. My advice to those of you still on the fence would be,  let the past be your guide.
I believe with almost 99% certainty that this will happen again ... and soon!
And this is also the reason I became involved with the Silver Snowball. I collect American Silver Eagle Bullion coins for lots of reason, some of my favorite being privacy and near instant liquidity (if and when needed) but those are just a few. What I like about the Silver Snowball is #1 - simplicity and leverage.
Its all about Silver! This is not MLM and your not going to become a Billionaire or get a free BMW.. You will earn Silver Eagle Bullion coins .. Here's How