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Thread: Premiums are high because

  1. #1

    Default Premiums are high because

    Watched a video and what ceo says makes sense.

    They get allocations from mints, many mints are not ramping up production. So they go to 3rd parties that charge more. Demand not being met by primary suppliers. If you buy thousand ounce silver bars, the premium is only $.30.

    This sounds like an opportunity but given that the mints are government run their behavior is unpredictable as market considerations only form part of their decision making process.

    They meaning larger companies like provident, jm bullion, APMEX etc

  2. #2

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    Mints are government run? The last time I checked the government share of pretty silver production was much smaller than the private mints.

    The problem is this: pretty silver is produced in a 'just in time manufacturing' fashion; meaning the mints do not want to buy and hold more inventory that they can move in a very small window. This makes the whole retail supply chain subject to premium jumps when they can't get as much inventory as they would love to sell.

    The moment the first retailer get their hands on enough inventory you'll have them selling for a dollar less than the competition, followed by said competition following suit so they can too cash in on the feeding frenzy.

  3. #3

    Default

    Quote Originally Posted by DBCooper View Post
    Mints are government run? The last time I checked the government share of pretty silver production was much smaller than the private mints.

    The problem is this: pretty silver is produced in a 'just in time manufacturing' fashion; meaning the mints do not want to buy and hold more inventory that they can move in a very small window. This makes the whole retail supply chain subject to premium jumps when they can't get as much inventory as they would love to sell.

    The moment the first retailer get their hands on enough inventory you'll have them selling for a dollar less than the competition, followed by said competition following suit so they can too cash in on the feeding frenzy.
    Maybe splitting hairs but are private producers of shiny bullion called mints? And yes its nomenclature is eponymous, the u.s. mint.

    I'd be interested in production figures comparing the mint to private producers of finished silver. So if the u.s. mint is having a problem getting blanks ostensibly so are private companies. I welcome comment.

  4. #4

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    Quote Originally Posted by Silver76 View Post
    Maybe splitting hairs but are private producers of shiny bullion called mints? And yes its nomenclature is eponymous, the u.s. mint.

    I'd be interested in production figures comparing the mint to private producers of finished silver. So if the u.s. mint is having a problem getting blanks ostensibly so are private companies. I welcome comment.
    You raise an interesting question. When I look around, I find the following -

    "Sunshine Mint" actually stamps their products as Sunshine Minting.

    Sept 2022 - https://jcsgold.com/understanding-th...-the-u-s-mint/
    "If you’ve been wondering why the current premium over spot silver for*American Silver Eagles*is so much higher than it is for other world bullion coins like*Canadian Silver Maple Leafs*and*British Britannias, the reason has to do with a shortage at the*United States Mint*– not a shortage of silver but of the silver planchets which are used to strike the coins and which the Mint does not produce and must obtain from other sources."

    August 2020 - https://www.usmint.gov/news/inside-t...on-terminology
    "The Mint buys large metal coils 1,500 feet long to cut out blanks. Blanks are flat metal discs that will eventually become coins or medals. "

    Jan 2014 - https://www.coinnews.net/2014/01/13/...r-circulation/
    "To begin the coin production process, a coil is fed into a Blanking Press that works like a giant cookie-cutter, punching out blanks at an amazing rate. For instance, in one minute more than 13,200 blanks for dimes can be produced — blanks are the round metal disks that get struck by dies in Coining Presses and become coins."

    http://www.sunshinemint.com/
    "SMI supplies high quality precious metal blanks to Government and Private Mints around the world. We specialize in fine silver and fine gold blanks and can also provide blanks in platinum, various precious metal alloys as well as base metal alloys."

    April 2022 - https://www.numismaticnews.net/coin-...ages-explained
    "When the federal legislation created the gold and silver Eagle coin programs in the mid-1980s, the Mint was directed to first obtain physical metals from American mining operations. If those supplies proved insufficient (and they were, especially for gold), the Mint was allowed to purchase bars off the commodity exchanges by purchasing contracts and holding them to maturity to request delivery. Early on, the U.S. Mint did manufacture their own silver Eagle dollar blanks from the physical silver it received. Annual silver Eagle mintages from 1986 to 2000 ranged from a low of 3,603,386 in 1996 to a high of 11,442,335 in 1987. At some point, the U.S. Mint stopped acquiring physical silver to prepare their own silver Eagle dollar planchets. Instead, it went to outside planchet suppliers such as Sunshine Minting, Leach & Garner, the Perth Mint and possibly even the Royal Canadian Mint"
    “The Federal Reserve is not currently forecasting a recession.”
    Fed Chairman Ben Bernanke, January 2008
    This is no longer posted in the Fed Minutes of January 2008, but still quoted here - https://www.nbcnews.com/id/wbna22592939. The FOMC minutes still quote MR. Reifschneider. as stating the same thing.

  5. #5

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    March 2018 - https://www.coinworld.com/news/us-co...ternative.html

    "The U.S. Mint is contemplating what to do as 10 gas-powered rotary hearth annealing furnaces currently used at the Philadelphia and Denver Mints in planchet production reach the end of their useful service life.

    The Mint is studying whether to replace the furnaces, or to outsource annealing operations while still retaining blanking production in-house, or whether to have all blanks produced by outside vendors."
    “The Federal Reserve is not currently forecasting a recession.”
    Fed Chairman Ben Bernanke, January 2008
    This is no longer posted in the Fed Minutes of January 2008, but still quoted here - https://www.nbcnews.com/id/wbna22592939. The FOMC minutes still quote MR. Reifschneider. as stating the same thing.

  6. #6

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    Awsome info Silverpalm. Definitely helping us get closer to why the prices are currently so damned high. I never realized how important Silver Eagles were to the overall market. They are the standard and as they go so goes the rest of the market. Thanks for the contribution.

  7. #7

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    They say robust demand 1.2 billion oz. It's a good metal
    https://www.reuters.com/markets/comm...ys-2022-11-18/

    I'm seeing about $4 over spot for very generic 10 oz. bars.

  8. #8

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    Not so sure about that article. Car sales are absolute **** right now. My brother in law spent his entire career as a car salesman and has recently had to change careers because cars are just sitting on the lot. This is industry wide. If we are heading into a recession...With all of the Tech layoffs it appears that way...Then demand for industrial silver should drop. Also, as folsk lose there jobs, investment demand will likely drop as well. Who knows for sure though. None of us has a crystal ball. Elon Musk makes cars and has been warning about a coming recession.

  9. #9
    Join Date
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    Default

    If you think about it it's not any more difficult to mint a bullion coin than it is to mint today's quarter that is worth 25 cents...You don't have to pay an $18 premium to get a 25 cent laminated quarter and that 25 cent quarter possesses the "pretty" factor and gets no extra value for it. Therefore premiums are all about supply/demand, psychology, madness, idiocy, and charge what the traffic will bear mentality and can change on a whim. I'm with longdon...Buy generic for the lowest premium, cuz in the end...silver is silver.

    Ag guy
    live for today, admit your faults, do the right thing (even if you don't want to) & trust God!
    This life is the training of the soul for the life to come. (accept that we live in a fallen world)
    Whether you know it or not, you are a spiritual eternal being! Ag guy

  10. #10

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    I believe I've read or have been told that the US mint has to purchase silver at spot and the silver has to come from USA mines. For silver coins that buy premade planchets and do not make their own. So different than the common CuNi production stuff. So if you are a maker of planchets and are being asked to sell your wares to the US mint while at the same time you can produce your own generic rounds with the same planchets and sell them at spot plus a whole bunch, why would you sell to the mint? I believe that's why the US mint is having a problem delivering silver coins.
    American Legion Preamble: https://www.legion.org/preamble

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