The 2008 Silver Eagle dollar coins have become so wildly popular, the U.S Mint stopped taking orders for the bullion coins in March, and late last month began limiting how many coins the exclusive group of 13 authorized buyers globally can purchase.
On Thursday, Michael DiRienzo, Executive Director of the Silver Institute, asked Edmund Moy, Director of the United States Mint, to meet with institute members to discuss immediate remedies to the shortage.
The American Eagle Silver Bullion coin is the country's only official investment-grade silver bullion coin with weight, content and purity guaranteed by the U.S. Government. With their unique government backing, the Silver Eagle dollar coin can be sold for cash at most coin and precious metals dealers globally. They are also considered legal tender and sell at silver's prevailing marketing price, plus a small premium to cover coinage and distribution costs.
The U.S. Mint advertised the coin as a building block for precious metals investment. They increase your portfolio's diversity by bringing balance because their value often moves independently of stocks and bonds. They offer liquidity, meaning they're easy to buy and sell. And in this fast-paced world of electronic investing, Silver Eagles are tangible investments whose beauty and artistry you can literally enjoy in the palm of your hand.
The Wall Street Journal recently reported that the coins are made at an armored facility in West Point, New York, next to the military academy. Dealers said they heard that the mint had run out of planchets-round metal disks ready to be struck into coins. ...The companies producing the blanks are also busy, limiting the mint's ability to increase production. The mint won't comment on the planchets.
Jim Hausman of the Gold Center in Springfield, Illinois, one of eight U.S. companies authorized to buy silver eagles, told the WSJ that the rationing will halve his expected annual sales of 4 million eagles.
As of May of this year, the U.S. Mint reports that 7,252,500 of the silver bullion coins had been sold, which had promised to well exceed the total of 9,887,000 coins sold last year.
In his letter to Mint Director Moy, the Silver Institute's DiRienzo said that the Wall Street Journal report about the inability of customers to purchase these coins greatly concerns the Silver Institute, and we would like to open a dialogue with the U.S. Mint on this matter.
Reports that the U.S. Mint is limiting the amount of coins its authorized buyers are allowed to purchase concerns the Institute, primarily because at the end of the supply chain awaits a customer, who is being inconvenienced and possibly shut out of the purchase of these coins, he wrote. In additional, if the public is unable to buy these coins, there is a potential downside to American miners, and at the end of the day, American jobs.
We strongly believe there are immediate remedies at your disposal to increase the production and delivery of blanks to the Mint for production that would provide the coins in sufficient supply to the authorized dealers and ultimately to the customers, DiRienzo said. We further believe the Mint should be looking at methods to streamline the current process and offer safeguards through planning and a concerted shift in current strategy for the second half of 2008, and beyond.
I am requesting a meeting with you at your earliest convenience to pursue ways the Silver Institute or its members companies can help alleviate this situation, and most importantly, develop a strategy to ensure this does not happen in the future, he concluded.