In another instance of economics in reverse, the US Mint has suspended production of certain gold and silver coins because of “unprecedented demand.”
Here’s the Mint’s press release:
Because of unprecedented demand for American Eagle Gold and Silver Bullion Coins, the United States Mint suspended production of 2009 proof and uncirculated versions of these coins. All available 22-karat gold and silver bullion blanks are being allocated to the American Eagle Gold and American Eagle Silver Bullion Coin Programs, as mandated by Public Law 99-185 and Public Law 99-61, respectively. Both laws direct the agency to produce these coins in quantities sufficient to meet public demand. The proof and uncirculated versions of the American Eagle Gold and Silver Proof Coins are not mandated by law.
The United States Mint is working diligently with current and potential blank suppliers to increase the supply of bullion coin blanks, so it can offer to the public the proof and uncirculated versions of American Eagle silver, gold, and platinum coins in 2010.
Avid gold-watchers will remember that this is exactly what happened in August 2008. The official line at the time was that the Mint simply did not have enough blanks or planchets — the metal discs used to mint coins — to keep pace with demand. Nevertheless, the production-cut set off a wave of conspiracy theories.
Some of those — such as the idea that the sell-out heralded the imminent bailout of Fannie Mae and Freddie Mac — proved to be rather prescient. For others — like the idea that the US government was hoarding gold in preparation for financial armageddon — the jury is still out.
We have yet to see any specific conspiracy theories on the most recent production-suspension but we’re sure it’s only a matter of time.
In fact, we note that in general, the craziness surrounding gold coins is just getting, well, crazier.
To wit, the US Government bringing in the Secret Service to actively pursue 76-year-old gold coins:
PHILADELPHIA, Sept. 28 /PRNewswire-USNewswire/ — The Office of U.S. Attorney for the Eastern District of Pennsylvania has filed a civil forfeiture complaint against 10 1933 Double Eagle gold pieces, consistent with U.S. District Court Judge Legrome D. Davis’ order dated July 28, 2009. The pieces were surrendered to the U.S. Mint by the descendants of Israel Switt. In addition to forfeiture of the 1933 Double Eagles, the government asks the court to declare that, with the exception of a single 1933 Double Eagle monetized and auctioned for more than $7.5 million in 2002, all other 1933 Double Eagles are the lawful property of the United States government.
As detailed in the complaint, the 1933 Double Eagles are $20 gold pieces that were manufactured by the U.S. Mint in 1933, but never released to the general public, because President Franklin Delano Roosevelt had issued Executive Orders, later incorporated by Congress into statutes, taking the United States off the gold standard, and requiring all persons to redeem their gold coins for paper currency or non gold coin. The U.S. Mint was prohibited from releasing any gold. Nevertheless a number of illegally concealed 1933 Double Eagles gold pieces have surfaced in the course of the past 70 years.
The U.S. Secret Service has investigated this matter since the government first became aware of a 1933 Double Eagle being put up for public auction in 1944, and the United States has recovered every such piece that it was able to locate. All of the recovered pieces were traced back through the Secret Service investigation to Israel Switt, a former Philadelphia jeweler, now deceased, who was arrested for unlawfully possessing gold coins in 1934. Switt was interviewed by the Secret Service about the 1933 Double Eagles multiple times before his death in 1990. He claimed that he had no more. However, in 2004, his descendants reported finding 10 of the contraband pieces in a safe deposit box that they had opened years before with items transferred from, but never probated through, Switt’s wife’s estate.
The United States, through this complaint, seeks to establish once and for all that these 1933 Double Eagles are and always have been the property of the United States.
Meanwhile there are also retail investors who are taking the coins just a wee bit too seriously:
Check out this incident in the ironically-named Copperopolis:
COPPEROPOLIS (October 7, 2009)- An 80-year-old Copperopolis man was jailed after he allegedly hit one man in the head with a metal pipe and fired his gun at a second man, causing a grazing wound, during a dispute over gold coins.
Faynell Toney was arrested at his home on Toney Way on Monday morning, according to a report by the Calaveras County Sheriff’s Department. The report said Toney was booked into jail on charges of battery and negligent discharge of a firearm.
A deputy reported he arrived at Toney’s home to find one of the two victims holding Toney down. The men said Toney attacked them because he was upset about some missing gold coins.
Related links:
Economics in reverse: The American Eagle flies away - FT Alphaville
Gold off the charts and heading to $1,500 says BarCap - FT Alphaville
