Silver moving towards $40 an ounce as Ron Paul to investigate the US Mint
byon 04-06-2011 at 06:03 PM (611 Views)
01 April 2011, 04:08 p.m.
By Daniela Cambone
Of Kitco News
Full Article Here
Texas (Kitco News) -- Rep. Ron Paul, R-Texas, has one question for the U.S. Mint: why is there a coin shortage?
He is aiming to get to the bottom of this during a scheduled April 7 hearing of his U.S. House Subcommittee on Domestic Monetary Policy to examine the bullion programs at the U.S. Mint.
“We are going to try and find out what the Mint has done so they can give us a better answer as to why there is a shortage. Why can’t they keep the supply of coins up?” said the congressman in an exclusive interview with Kitco News.
Demand for precious metals in the futures markets and in physical gold bullion coins increases as the dollar weakens, which often leads to coin shortages.
Part of the problem lies in manufacturing the blanks, said Paul. The blank planchets are not made at the Mint, which hasn't had the production capacity for this stage of the minting process since the budget cuts of 1981.
“Looks like we don’t even get (all) blank coins made in the U.S. – there is a contract with a foreign company, which makes no sense at all,” said the congressman.
Today there are three refineries that supply planchets to the Mint: VennerBeck Stern Leach in Rhode Island, Sunshine Minting in Idaho and Goldmark in Perth, Australia.
Paul said that a U.S. company may appear at the scheduled hearing with a solution.
“They can help relieve the shortage by providing these blank planchets for the Mint,” he said, not revealing the company.
“I think there is a huge demand and it is being provided by a bureaucracy, and the bureaucracy isn’t responding very well -- but I can’t believe there is any excuse for this,” he said.
The Mint is planning a major overhaul of the metals composition of coins and how they manufacture them. The Coin Modernization, Oversight and Continuity Act of 2010 gives the Mint greater flexibility in meeting the demand for bullion coins as well as meeting the demand for gold and silver numismatic items.