By April 11, 2011 4 Comments Read More →

US Mint Taken to Task for Outsourcing Bullion Blanks and Attitude

Four witnesses testifying before House Committee on Financial Services Subcommittee on Domestic Monetary Policy and Technology agreed that the US MINT loses at least one third of their bullion coin sales because they cannot meet demand.. “The Mint has taken steps to address its supply difficulties by adding additional capacity, but it still struggles to meet demand, particularly for the silver eagle bullion coins,” Terence Hanlon, president of Gage Metals, a Dallas-based precious metals dealer, told the lawmakers.

house commitee US Mint Taken to Task for Outsourcing Bullion Blanks and AttitudeRoss Hansen, found and CEO of the Northwest Territorial Mint said he was able to acquire the Medallic Art Company, a former primary producer of silver blanks for the Mint, because government officials decided to take their business somewhere else. Currently, the primary supplier of silver bullion blanks is the Coeur d’Alene Mint in Idaho with the First Mint of Australia as back-up.

The fact U.S. precious metal coin blanks were being purchased from Australia incensed several members of the subcommittee. Hansen suggested, “It should be made in the United States, not overseas. We’re providing American jobs.”

“We could supply all the blanks the U.S. Mint would ever need,” he declared.

Beth Deisher, editor of Coin World, told the subcommittee, “The quality of silver, gold and platinum bullion coins produced by the U.S. Mint is exceptional. However, the marketing of these coins is sub-par and is often disruptive to the marketplace.”

“Most of the Mint’s problems in marketing bullion coins are rooted in an ongoing failure to understand who its customers are and why they purchase bullion coins,” she observed.

ATB 5 oz mt hood ngc US Mint Taken to Task for Outsourcing Bullion Blanks and Attitude“Marketing multi-year bullion coin programs appears to be an arena in which the Mint continues on a self-destruct path,” Deisher said, “in which mistakes made in the first year of offering dramatically reduce sales potential for the remainder of the program.”

“The most current example is the Mint’s decision to produce only 33,000 of each design of the 5-ounce .999 fine silver versions of the 2010 America the Beautiful quarter dollars,” she noted, adding the program is supposed to be an 11-year investment program honoring five national parks and historical sites annually.

Although the program was approved in December 2008 production did not actually begin until Sept. 21, 2010. “Despite the Mint’s earlier announcements suggesting 100,000 of each of the five designs would be available to the market, five days before sales to the public were to begin, the Mint disclosed it would instead produce only 33,000 for each of the five bullion designs beating the 2010 date for distribution through its established network of authorized purchasers,” Deisher said.

“But again, we have low mintages that smack of contrived rarity, without thought or concern about the long-term consequences of these extremely low mintages,” she asserted,.

Deisher also told the representatives that “every time there is a new collector product offered and you go to the [U.S. Mint] website, people sit there for hours trying to get in and you can’t.” The situation is so bad “people will pay people who will sit for hours and hours trying to get into the site.”

“Some people are able to sit by their computer during business work hours and purchase in quantities, thereby shutting out others,” she asserted. “Those who successfully obtain the coins race to eBay to sell them at exorbitant prices and high profits.”

The veteran coin editor suggested the U.S. Mint encouraged the speculation by limiting some coins to one person per household. She quipped that dogs, cats and other beings have acquired their own addresses and households in order to get around the Mint’s limits.

While her publication covers major mints all over the globe, Deisher said she finds the problem only occurs at the U.S. Mint.

Meanwhile, Hanlon suggested, “Congress could give a further competitive edge to the American Eagle bullion products by adjusting the capital gains tax treatment of these investments [from 28% to 15%] to make them on a par with securities.”

“By lowering the rate, Congress could substantially boost the market potential for the America Eagles,” he advised. Hanlon believes bullion sales could easily increase by 30% to 50% to meet investor and collector needs.

“I believe investors would welcome the Mint’s resumption of the production of the platinum Eagles this year, which the Mint halted at the end of 2008,” Hanlon suggested.

He feels the anticipated introduce of a palladium American Eagle coin this year will bring a new dimension to the Mint’s offering. “It will offer investors an attractive price point in relation to gold and platinum, with different supply/demand factors for the metal.”

Ranking subcommittee member William Clay, Jr., D-Missouri, noted that no staff members of the U.S. Mint were present at Thursday’s hearing.

Subcommittee Chairman Ron Paul, R-Texas, said the situation at the Mint is a “reflection of what we are doing to our money,” in particular what he termed a “huge debasement of our currency.”

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4 Comments on "US Mint Taken to Task for Outsourcing Bullion Blanks and Attitude"

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  1. Rick P. says:

    The US Mint after all is a government agency. Their inefficient and half-hearted approach to doing their job is no different than the workers in our other Federal agencies. Turn the production of US Bullion coins over to a group of private mints with production bonuses in place and see how much more efficient the process becomes. However, I think the buyers in the know concerning the collapse of our fiat money supply are buying and will continue to buy whatever coins the US Mint can produce at virtually any price. See Why You Must Buy Silver Now http://survivalus.blogspot.com/2011/02/why-you-must-buy-silver-now.html

  2. David says:

    Don’t fret over this. All that is happening is a following of the George Soros theme of destroying the US money system. Its quite simple really. Just destroy the US from within. Kill our currency and the rest will die too.

  3. stu gore says:

    What do you expect from incompetent government employees? Nothing new here. It’s a reflection of the bungling, incompetency rampant in the WHOLE government arena. Federal, state, local governments, at the taxpayers expense, waste, loot, and defraud Americans at a rate of historical porportions.

  4. Bill Krall says:

    I have never understood why the Mint needs the so called “Authorized Dealers” to distribute their issues. Surely the Mint could sell all of their offerings directly to the public without the help of the authorized handlers. Does anyone think that Mint really needed the “Appointed ones” to distribute the paltry (in mintage) 5oz silver quarter dollars???? I wonder how much GREASE is paid (and to whom) for the continuance of this incredibly monopolistic policy. Soon our misfit leaders will call for a new North American coin to replace the “Slug” that they are minting now.

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