Covid Outbreak at the US Mint Causes Shortage of Gold and Silver Coins

Mish

Due to a Covid outbreak the US mint cannot produce enough coins to meet demand.

Bloomberg reports U.S. Mint Has Reduced Silver, Gold Coin Supplies to Purchasers

The US Mint has reduced the volume of gold and silver coins it’s distributing to authorized purchasers as the coronavirus pandemic slows production, a document seen by Bloomberg shows.

The Mint’s West Point complex in New York is taking measures to prevent the virus from spreading among its employees, and that will probably slow coin production there for the next 12 to 18 months, the document shows. The facility is no longer able to produce gold and silver coins at the same time, forcing it to choose one metal over the other, according to the document, which was presented to companies authorized to buy coins from the Mint last week.

“The pandemic created a whole new set of challenges for us to manage,” the Mint said in the document. “We believe that this environment is going to continue to lead to some degree of reduced capacity as West Point struggles to balance employee safety against market demand.”

To cope with demand, the Mint is now asking dealers to provide their 10-day and 90-day forecasts for demand for the first time ever. That will allow it to decide what products to make as some are more labor-intensive than others, according to the document. If the Mint decides to make one-tenth of an ounce of gold, for instance, it must cut production of American Eagle Silver coins.

No Shortage of Gold or Silver

This story is sure to bring out all sorts of silliness regarding a shortage of physical gold and silver as well as conspiracy theories regarding how much gold is in Fort Knox.

Also look for nonsensical articles on the alleged price difference between paper gold and physical gold.

Unobtanium?

I discussed this setup on March 31 in No WSJ, Gold is Not the New Unobtanium: Where to Buy?

On March 29 I tweeted: "It is easy enough to buy gold and silver at Goldmoney.  I bought silver today at Goldmoney. If you insist on forms in limited supply, yep, the price is high."

Gold and Silver Coins From the Mint 

The markup on coins from the mint is too ridiculous for me.

Gold Hits New Record High and There's More to Come

In case you missed it, please see my report on Gold COTs which led me to this viewpoint: Gold Hits New Record High and There's More to Come

Gold vs the US Dollar

If by chance you think gold moves inversely to the US dollar you need to reconsider.

For discussion, please see Nonsense from the WSJ on Gold vs the Dollar

Mish

Comments (30)
No. 1-11
Quatloo
Quatloo

IMHO if you don’t hold the gold/silver you are at risk. Even the most trusted company holding/storing your gold may collapse and leave you with nothing. I have personally seen that happen.

tokidoki
tokidoki

Man, could it be that GoldMoney is turning into a scam?

Felix_Mish
Felix_Mish

@Mish Where did you get info that there is an "covid outbreak at the US Mint"?

Casual_Observer
Casual_Observer

The world is ending. All hope is lost. Buy gold now.

Tony Bennett
Tony Bennett

"Due to a Covid outbreak the US mint cannot produce enough coins to meet demand."

...

Oh, wonderful.

Does that mean Mike Mezak (coin hawker on tv for decades) will hit 11 on Shilling meter??

I might have to check him out ... to see if he does indeed have another gear ... which I did not think possible ...

BaronAsh
BaronAsh

Living where I do have been unable to find gold or silver without 25%+ markups so I just didn't do it though wanted to years ago.

But the coronavirus angle: Mish, you've gone dark on it. Suggest you bone up on the data: https://www.americasfrontlinedoctors.com/ where they have extensive white papers:

https://www.americasfrontlinedoctors.com/ https://www.americasfrontlinedoctors.com/content

It was already well-known in 2005 that HCQ (and the other 'quins) are effective against not only malaria but also coronaviruses and most flus. Known. The simple fact is that the pandemic aspect has been a huge disinformation campaign from the get-go. It would have been quite easy to prevent widespread infection of any given population by simply recommending prophylactic doses to all at-risk people including frontline healthcare providers.

I heard about it in March, quickly found several papers, managed to buy it the next day before it became impossible to get (so much for market efficiency, eh?) and a really nasty flu disappeared like magic in about 8 hours.

People are still terrified in the US, wearing useless masks (not all of them are useless but the ones most people are wearing are) even when driving alone in their cars, even when walking on a beach etc. etc. and all because of a massive disinformation campaign designed to reduce national ability to effectively handle this relatively minor health threat.

This is actually a big story: one of the largest economic disasters in the post-industrial revolution era deliberately engineered. Why? No end of theories could be offered, but that it has happened is hard to refute.

Anda
Anda

When it comes down to real life use of metal as currency, then the mint is not that important at all. Older coins that are recognisable as authentic go for nearer to by weight. The US mint just provides first buyer with guarantee of fineness, which is ok and some will pay premium for that plus for the historic/mint state of a coin, but in terms of gold or silver as money only a small advantage. In practice if precious metal coins go into circulation widely, by that time no one is going to much care what is printed on them as long as the quality can be recognised. I.e. even if US fresh minted coins still hold a premium, you are just going to get back what was paid for them, same as if you buy other acceptable coins just by weight. New minted coins are nice obviously, so not to put people off either, but in terms of the US mint slowing down it is not that important to my view - the silver and gold they stopped obtaining, where it was from miners and not the open market, will likely just end up on the market instead, just not as coins....unless you think they are stockpiling supply waiting for higher prices to turn a higher profit...even then I don't imagine it would by itself move the market much.

valpal1
valpal1

the coin shortage is extremely easy to explain: The Fed and Treasury declared banks and armored carriers and high cash volume stores (Walmart, Target, grocery stores) are essential services and required them to stay open. Then, in the governments brilliance, told the Mint and Fed employees to go home for 14 weeks. Nobody left to order metal and coins, nobody there to process metal and coins, nobody there to direct distribution of metal and coins. Hence, the shortage

KyleW
KyleW

Those are proof editions, which have an additional markup. I would like to know how much gold is actually in Fort Knox. I would guess it's empty, but who knows? Does it actually matter?

SusannaAM
SusannaAM

It's interesting to consider, that these have a value of currency of exactly $1, and if someone deposited it in a bank account, their bank balance would reflect $1 and no more. I wonder if this did happen, would the bank teller be obligated to return it to the Fed?


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