Illegal Rationing Of Silver Eagles?

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Author	Replies: 10 / Views: 1,209
bobby131313 Forum Dad United States 24147 Posts	Posted 06/06/2008 09:54 am Open Letter to Henry Paulson, US Secretary of The Treasury on Illegal Rationing of Silver Eagles Open letter to: Henry Paulson US Secretary of The Treasury 1500 Pennsylvania Avenue, NW Washington, DC 20220 RE: US Silver Eagles Illegal Rationing Dear Sirs: It has come to my attention that 1oz US Silver Eagle coins are being rationed by the US Mint to 13 authorized dealers and not being made available to the public in adequate amounts. http://www.silverinstitute.org/news/pr29may08.html According to US Law: 31USC5112(e) this action is illegal and I demand that this rationing program end immediately. http://frwebgate.access.gpo.gov/cgi...e:+31USC5112 Quote: (e) Notwithstanding any other provision of law, the Secretary shall mint and issue, in quantities sufficient to meet public demand, coins which- -----(1) are 40.6 millimeters in diameter and weigh 31.103 grams; -----(2) contain .999 fine silver; -----(3) have a design- ----------(A) symbolic of Liberty on the obverse side; and ----------(B) of an eagle on the reverse side; -----(4) have inscriptions of the year of minting or issuance, and the words "Liberty", "In God We Trust", "United States of America", "1 Oz. Fine Silver", "E Pluribus Unum", and "One Dollar"; and -----(5) have reeded edges. (f) Silver Coins.— -----(1) Sale price.-The Secretary shall sell the coins minted under subsection (e) to the public at a price equal to the market value of the bullion at the time of sale, plus the cost of minting, marketing, and distributing such coins (including labor, materials, dies, use of machinery, and promotional and overhead expenses). -----(2) Bulk sales.-The Secretary shall make bulk sales of the coins minted under subsection (e) at a reasonable discount. -----(3) Numismatic items.-For purposes of section 5132(a)(1) of this title, all coins minted under subsection (e) shall be considered to be numismatic items." The law is clear that the silver coins must be supplied to the US public in "quantities sufficient to meet public demand" EVEN IF it means the US Mint drives up the price of silver bullion on the open market in order to obtain the silver needed to produce the US Silver Eagles. That rise in price should, theoretically, decrease the current voracious demand for US Silver Eagles and allow for the true price discovery of silver bullion. That's how our freely traded markets are supposed to function in order to determine the "fair market value" of any asset. Unfortunately, the rationing of Silver Eagle coins greatly distort the fair market value of both the coins as well as the silver bullion used to make them. By rationing the coins, the US Treasury and US Mint are artificially suppressing the demand for silver bullion thus creating artificial downward pricing pressure on silver. The size of this artificial price/demand loss is unknown BUT given that the 1oz US Silver Eagle is by far the most popular silver coin in the world, I would suggest that the artificial suppression is significant. For example, when the Silver Eagle rationing program started in mid-March 2008, the price of silver bullion immediately dropped from $21/oz to $17/oz thus trimming 20% off its fair market value in only 4 days. Clearly the fair market value is being artificially distorted. As stated in section (f) above, the public is entitled to purchase US Silver Eagle coins at the "market value of [silver] bullion" plus costs associated with production. Currently, that is not the case. I expect you to end the rationing program immediately and fulfill your legal obligation to the people of the United States of America. The US Mint is not sanctioned to be a market maker or market manager in precious metals. The Mint is, by law, the facilitator of US Silver Eagle supply and that supply is legally designated to be limited only by the willingness of the purchaser to buy. If the Mint receives an order for 10M ounces or 20M ounces or even more it is 100% legally obligated to immediately supply those Silver Eagles from inventory or enter into the physical silver market and purchase the silver bullion and process it. What effect that purchase has on the price of silver bullion should not be of consequence to the Mint since the price is passed on to the purchaser (plus fabrication). Luckily, for the stability of the silver market, the CFTC has assured the world that there is no silver price manipulation and that there is currently (and apparently always will be) an adequate supply of physical silver to cover any demand that surfaces. http://www.cftc.gov/newsroom/genera...5499-08.html I would also like to point out that the US Silver coin has always had tremendous historical and monetary significance to the citizens of the United States of America. US Silver Eagles represent "honest money" and to witness their continued manipulation is disheartening. I am also sending this letter to other interested parties below to inform them that another silver crime is in progress. Sincerely, Bix Weir US Citizen Cc: Michael Mukasey, US Attorney General A. Roy Lavic, Inspector General CFTC Senator Dianne Feinstein Congressman Ron Paul All Recent News Shop CCF Members on eBay. Report this Post to the Staff

eaglefoot Pillar of the Community United States 6326 Posts	Posted 06/06/2008 10:02 am I did not know that there was any truth behind the rumors of this "rationing" of the ASE's!....interesting! Edited by eaglefoot 06/06/2008 10:07 am Report this Post to the Staff
amac44 Member United States 3242 Posts	Posted 06/06/2008 10:04 am About time someone tried to bust up the big buyer hold on our US Mint Report this Post to the Staff
bobby131313 Forum Dad United States 24147 Posts	Posted 06/06/2008 10:25 am Well the way I read it it is not illegal. Here is what the letter author quotes the law as saying... Quote: The law is clear that the silver coins must be supplied to the US public in "quantities sufficient to meet public demand Bolding is mine. That is not how the quoted law reads. It reads like this... Quote: Notwithstanding any other provision of law, the Secretary shall mint and issue, in quantities sufficient to meet public demand, coins which-- Again, bolding is mine. The law does not state that the coins must be issued to the public, it says that enough coins must be issued to meet public demand. There's a difference. They still meet the literal requirement of the law. I think the confusion lies in the fact that the US Mint generally sells all their products to the public. If the government passed a law that Ford Motor Company shall build and issue, in quantities sufficient to meet public demand, cars which........ No one would assume that Ford Motor Company must sell the cars directly to the public. Because the norm for Ford is to sell the cars through dealers, no one would question it. So IMO, the fact that ASE's are being released to dealers only is in compliance, but they still must meet public demand to satisfy the law. Shop CCF Members on eBay. Report this Post to the Staff
shatsi Pillar of the Community United States 1541 Posts	Posted 06/06/2008 10:45 am Is this the bullion version of ASE? Report this Post to the Staff
trdhrdr007 Pillar of the Community United States 2335 Posts	Posted 06/06/2008 11:44 am I don't see the problem with the mints selling method. The general public can buy Eagles in unc or proof from the website. They can also buy bullion coins from the mint if they meet the minimum buying requirements. It's a heck of a stretch to think that the silver price went down because of the lack of availability of silver in the form of Eagles. The same amount of silver is still available in the world whether the US Mint turns it into coin form or not. Edited by trdhrdr007 06/06/2008 11:45 am Report this Post to the Staff
biokemist6 Bedrock of the Community United States 12437 Posts	Posted 06/06/2008 12:16 pm Quote: Is this the bullion version of ASE? yes Here is the official response from the Mint, taking note of my bolding what I think are the keys of the issue- Since the introduction of the 2008 American Eagle Silver Bullion Coin Program, the United States Mint has issued a record number of coins (about 9.65 million), as demand for them has increased exponentially. That number is almost as high as the United States Mint's production for the entire year of 2007 (about 9.8 million). By law, the United States Mint's American Eagle silver bullion coins must meet exacting specifications and must be composed of newly mined silver acquired from domestic sources. The United States Mint will continue to make every effort to increase its acquisition of silver bullion blanks that meet these specifications and requirements to address continuing high demand in the silver bullion coin market. It doesn't sound like the Mint is rationing because they just feel like it, it is more of a case of a lack of new US silver supplies and lack of capacity to physically mint more SAEs since the Mint is apparently at full production capacity. Remember, even though there is no mint mark, these are minted at West Point and they are not exactly capable of turning out hundreds of millions of coins like Philly and Denver. Maybe if the Silver Institute prodded their members to open some new US mines so the Mint could have adequate supplies, they wouldn't have to throw a hissy fit Report this Post to the Staff
TreasHunt Pillar of the Community United States 2540 Posts	Posted 06/06/2008 12:22 pm Another individual who just wants silly publicity. Ignore him and maybe he'll go away. Report this Post to the Staff
XavierOfGreen Pillar of the Community United States 2589 Posts	Posted 06/06/2008 1:08 pm If the West Point Mint does not have sufficent capacity to produce the required amount of coinage then either the other mints should make up the difference by minting silver eagles themselves, or another branch mint should be opened perhaps in new orleans or carson city? Report this Post to the Staff
KurtS Pillar of the Community United States 5318 Posts	Posted 06/06/2008 1:31 pm Quote: By rationing the coins, the US Treasury and US Mint are artificially suppressing the demand for silver bullion thus creating artificial downward pricing pressure on silver. I read this once before and it struck me as funny because market demand normally reacts to reduced supply by pushing prices higher. That much is well-known, so I read this as spin to explain why the market hasn't behaved as some predicted. Certainly the silver collector/investor market isn't exactly cornered by ASEs. One could also ask the author whether he represents silver trading interests, or has a significant personal investment in this metal; disclosure on both ends is only fair. Edited by KurtS 06/06/2008 1:34 pm Report this Post to the Staff
snowman Pillar of the Community United States 1840 Posts	Posted 06/06/2008 4:06 pm If the Mint is artificially suppressing prices, wouldn't it make sense for him to shut his mouth, stockpile silver and wait for the inevitable price correction? Report this Post to the Staff
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