Gyroscopic Investing

The U.S. Mint sold a whopping 14.26 million ounces of American Eagle silver coins last quarter.  That's the most in 29 years.

What the hell is going on?  Who the hell is buying?  It sure isn't Mom 'n Pop nor PPers.

P.S. It's happening in Canada and Australia (400% increase in one month!) also.

I don't know, but "Soaring Silver Sales" is almost as good a tongue twister as "Six Slippery Sliding Snakes" 

MachineGhost wrote: The U.S. Mint sold a whopping 14.26 million ounces of American Eagle silver coins last quarter.  That's the most in 29 years.

What the hell is going on?  Who the hell is buying?  It sure isn't Mom 'n Pop nor PPers.

P.S. It's happening in Canada and Australia (400% increase in one month!) also.

Hmm, it couldn't be because the official price is being held down by derivatives and the actual market clearing price for physical metal would be much higher. No, that would be a conspiracy theory!

Libertarian666 wrote: Hmm, it couldn't be because the official price is being held down by derivatives and the actual market clearing price for physical metal would be much higher. No, that would be a conspiracy theory!

So you're saying a lot of people believe spot silver is being manipulated down so they're rushing to buy silver coins?  I'm not sure I understand the logic.  Is the implication here that spot silver should be a lot higher?

MachineGhost wrote:

Libertarian666 wrote: Hmm, it couldn't be because the official price is being held down by derivatives and the actual market clearing price for physical metal would be much higher. No, that would be a conspiracy theory!

So you're saying a lot of people believe spot silver is being manipulated down so they're rushing to buy silver coins?  I'm not sure I understand the logic.  Is the implication here that spot silver should be a lot higher?

Yes.

I used to read Ed Steer's Gold and Silver Daily, but since he's started charging for it I stopped.  A while ago he and Ted Butler were surmising that JP Morgan was buying large amounts of silver coins.  Here's a blurb from Ted Butler about it http://www.goldcore.com/us/gold-blog/te ... n-history/

[quote=http://www.goldcore.com/us/gold-blog/te ... n-history/]The big buyer is exploiting a loophole in the law that requires the Mint to produce to whatever the demand might be. So JPMorgan artificially depresses prices via short sales on the COMEX and then requests that the US Mint sell it all the Silver Eagles it can produce. It doesn’t care if it is paying $2 over the spot price, JPM wants all the silver it can get its hands on. But what about selling the coins I claim JPMorgan has acquired? The coins will not be sold as coins, but melted into 1,000 ounces bars. In fact, some of the 100 million+ ounces of coins may have already been melted and cast into good delivery bars. Considering that the coins are the same purity as 1,000 ounces bars, melting is a simple and a low cost process.[/quote]

Isn't it illegal to melt legal tender down???

Can you imagine the uproar these days if an investment bank was found out to be buying up millions of American Silver Eagles to illegaly melt them down into good delivery bars?

The investment banks don't have a good history of not blowing up with their huge positions, so I guess we'll see what happens.

MachineGhost wrote:

http://www.goldcore.com/us/gold-blog/ted-butler-the-biggest-silver-haul-in-history/ wrote:The big buyer is exploiting a loophole in the law that requires the Mint to produce to whatever the demand might be. So JPMorgan artificially depresses prices via short sales on the COMEX and then requests that the US Mint sell it all the Silver Eagles it can produce. It doesn’t care if it is paying $2 over the spot price, JPM wants all the silver it can get its hands on. But what about selling the coins I claim JPMorgan has acquired? The coins will not be sold as coins, but melted into 1,000 ounces bars. In fact, some of the 100 million+ ounces of coins may have already been melted and cast into good delivery bars. Considering that the coins are the same purity as 1,000 ounces bars, melting is a simple and a low cost process.

Isn't it illegal to melt legal tender down???

Can you imagine the uproar these days if an investment bank was found out to be buying up millions of American Silver Eagles to illegaly melt them down into good delivery bars?

The investment banks don't have a good history of not blowing up with their huge positions, so I guess we'll see what happens.

I'm surprised the investment banks aren't melting down pennies for the precious zinc (or even copper if they are lucky!)


edit: lol, jk:

http://www.coinflation.com/

MachineGhost wrote:

http://www.goldcore.com/us/gold-blog/ted-butler-the-biggest-silver-haul-in-history/ wrote:The big buyer is exploiting a loophole in the law that requires the Mint to produce to whatever the demand might be. So JPMorgan artificially depresses prices via short sales on the COMEX and then requests that the US Mint sell it all the Silver Eagles it can produce. It doesn’t care if it is paying $2 over the spot price, JPM wants all the silver it can get its hands on. But what about selling the coins I claim JPMorgan has acquired? The coins will not be sold as coins, but melted into 1,000 ounces bars. In fact, some of the 100 million+ ounces of coins may have already been melted and cast into good delivery bars. Considering that the coins are the same purity as 1,000 ounces bars, melting is a simple and a low cost process.

Isn't it illegal to melt legal tender down???

Can you imagine the uproar these days if an investment bank was found out to be buying up millions of American Silver Eagles to illegaly melt them down into good delivery bars?

The investment banks don't have a good history of not blowing up with their huge positions, so I guess we'll see what happens.

Actually, I think you can melt anything that is not used in circulation.
And as for the uproar, that would be almost as loud as the uproar about the deficit; that is, not very loud at all.

Libertarian666 wrote: Actually, I think you can melt anything that is not used in circulation.
And as for the uproar, that would be almost as loud as the uproar about the deficit; that is, not very loud at all.

You do realize that without a deficit, there would be no Treasuries issued and no savings vehicles for the private sector, including the PP?  It's not a bad thing.  T-Bills are now at negative to zero yields because everyone is running over each other to rush into them ahead of the debt ceiling limit.  The debt ceiling prevents more Treasuries from being issued!  There's no other asset in the world that could possibly handle all the gargantuan institutional flows when they need to go "risk off".

Now, I sure wouldn't hold my breath and assume that Democrats or Republicans understood what I just said.  I think both are economic ignoramuses but for completely different reasons.

MachineGhost wrote:

Libertarian666 wrote: Actually, I think you can melt anything that is not used in circulation.
And as for the uproar, that would be almost as loud as the uproar about the deficit; that is, not very loud at all.

You do realize that without a deficit, there would be no Treasuries issued and no savings vehicles for the private sector, including the PP?  It's not a bad thing.  T-Bills are now at negative to zero yields because everyone is running over each other to rush into them ahead of the debt ceiling limit.  The debt ceiling prevents more Treasuries from being issued!  There's no other asset in the world that could possibly handle all the gargantuan institutional flows when they need to go "risk off".

Now, I sure wouldn't hold my breath and assume that Democrats or Republicans understood what I just said.  I think both are economic ignoramuses but for completely different reasons.

Our economic worldviews are too different for us to have a meaningful conversation about this issue.

Desert wrote: Wow, metals prices have really cratered.  It wasn't too long ago that the metal value in nickels was higher than $.05.  There goes my retirement plan of hoarding nickels.

I got a coffee cup full already!

1 GigaWatt solar modules (about 50 million, enough to power 750,000 homes) = 8.3 million ounces of silver, which is about 8% of mined silver produced globally.

100 GigaWatt solar modules = Installed in China by 2020 = 731.6 million ounces of silver, 70% of 2014's supply.

Throw in India's cultural fetish for jewelry demand this year at 300 million ounces and it wipes out 2014.

Interesting, but still doesn't explain coin demand.  The premiums are ridiculous now.