October 2022 - Week 2 Edition
Dollar’s Rally Pushes Gold Down
Gold is back under $1,700, mostly due to the dollar’s rally back to 113 on the U.S. Dollar Index vs. 110 a week ago and 97 at the start of the year. Last Friday, a “stronger than expected” jobs report pushed interest rates and the dollar up and gold and stocks down. Although the unemployment rate dropped to 3.5% that number is almost meaningless since it represents just the tip of the iceberg of unemployed people – those actively looking for work. It doesn’t include the nearly 100 million Americans age 15 to 64 who are Not in the Labor Force or who are not looking for work, which is up over 45% from 68+ million at the end of 1999.
The Mint Gives an Unsatisfactory Answer to Rep. Mooney’s Inquiry Over Silver Eagles
On September 21, 2022, U.S. Mint Director Ventris C. Gibson answered the August 25 letter of inquiry by West Virginia Republican Rep. Alex Mooney to her and Treasury Secretary Janet Yellen about certain irregularities in the timely and affordable delivery of American Silver Eagles – the most popular silver bullion coin in the world today. Deliveries have been delayed and premiums have risen to 70% above silver spot prices. In her response, the Director addressed five questions, the first being:
Does the Secretary believe the Silver American Eagle coin is being produced in “qualities and quantities that . . . are sufficient to meet public demand”?
In essence, she blamed the “currently limited availability of silver blanks” due to “disruptions in the silver blank vendor capabilities that resulted from the crippling effects of the pandemic,” but that seems to be an old story, with even President Biden saying, “the pandemic is over.” In this and another question, she notes “with pride” that the Mint stayed open while other Mints closed in the pandemic but most other Mints have managed to keep their silver bullion coins flowing and at far lower premiums over spot prices.
What Director Gibson may not have realized is that in her response she included what could be considered an admission to violating federal law regarding whether American Silver Eagle coins were being produced to support the current demand. Her response clearly stated the Mint made decisions on where to allocate its silver blanks in regard to bullion versus numismatic production. This contradicts the U.S. Mint’s previous policy and procedure. For example, the Mint stopped making numismatic proof American Silver Eagles to meet American Silver Eagle bullion demand because both utilize the same silver blanks
In her reply to Rep. Mooney, Director Gibson stated, “Given the limited supply of silver blanks, the United States Mint must judiciously consider how to divide those blanks among its various silver bullion coins and numismatic products.”
U.S. Code Ch. 31, Sect. 5112 (e) states, “(e)Notwithstanding any other provision of law, the Secretary shall mint and issue, in qualities and quantities that the Secretary determines are 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.”
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