I heard a rumor...

[Keleum]

I heard the mint can't take any more orders on silver eagle buillon coins for the year, pending a new bill in the house.

 

Is the mint "at capacity" for producing silver eagles for the year already?

 

What's the scoop, and what impact does it have on the "collector" versions?

[Oldtrader3]

The Mint still list the SAE's as in stock. Maybe it is bulk sales to dealers at a lower price that they will cut. They are not making much seignorage on SAE's any more with the high and volatile silver price.

[DC Dawg]

Bullion sales to dealers for American Silver Eagles have been limited. It has not been announced but dealers who order over the limit amount will be told that there is a limit in place.

 

According to my source, there is a limit on the number of coins the Mint can publish. Starting with Public Law 99-16, the law that authorizes the Silver Eagle program, there are limits described that points to another section of the United States Code that describes the limits on what the Treasury can be allocated for bullion coins.

 

I have not traced the reasoning through the maze of laws being talked about.

 

By law, the US Mint has to purchase its silver on the open market from US sources. Part of the law says that the Treasury can purchase a percentage of the mined silver. Since the prices of silver has risen and silver production has decreased a bit over the last two years, the Treasury has purchased less silver than in years passed.

 

Demand for silver bullion is higher than in 2007--more than 100 percent higher! According to the Mint, total sales for bullion silver is 7,252,500 coins in 2008. For the first five months in 2007, the total was 3,007,000.

 

Also, the law says that the Treasury must keep a percentage of their silver purchases in reserve. This came from the Thomas Act that was part of the Agricultural Adjustment Act of 1933. This was to authorize the purchase of silver needed to pay off World War I debts and mandated that a reserve be maintained to prevent a similar situation in the future.

 

I am speculating that the folks in Treasury are playing games because of the House passing H.R. 5512, the Coin Modernization and Taxpayer Savings Act of 2008, which Director Moy has said that the bill does not give the Mint full control of the metal contents of the coins. They may be getting pedantic with the laws to cause problems for congress.

 

Scott

[Conder101]

They are not making much seignorage on SAE's any more with the high and volatile silver price

The mint sells the SAE to distributors for a set price of $1.25 an oz over spot. It doesn't matter what the price of silver is. The only way the mint can get hurt is when the spot price takes a major tumble in a short period of time. And even then it probably isn't too bad because I'm sure they don't keep much inventory on hand that isn't pre-ordered.