URGENT: GOLD & SILVER SHORTAGE UPDATE

If this account is accurate then it appears that the shortage isn't with Gold, but our ability to meet demand in a timely manner.

We have some damage control information from Forbes.com:

"Gold Coin Shortage
Heather Struck, 11.25.09, 12:15 PM EST
Don't worry, there's not a shortage of gold, just of equipment for coining it in the U.S.

The United States Mint has a gold problem. As demand for precious metal in the futures indexes and in physical gold bullion coins increases as the dollar weakens, there's been a run on the Mint. Don't worry, there's no shortage of gold. It's just that the Mint doesn't have the resources to make it into coins due to outsourcing and budget cuts decades ago.

The problem lies in manufacturing the blanks. 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. The Reagan administration began using private companies, which process and ship the blanks to the Mint's West Point, N.Y. site for stamping and engraving. 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

Though some have taken the shortage of gold coins to mean a shortage of gold in general, folks in the industry say it's not a worry. The Gold Bullion Coin Act, which put the coin programs in place in 1985, stipulates that the gold must be mined in the U.S. Johnson Matthey ( JMPLY.PK - news - people ), the London-based company that refines most of the gold that is mined in the U.S., says, "there is no shortage of gold" coming out of the ground these days.

The Mint's Oct. 6 announcement that it would not produce any gold "proof" coins this year is testament to its diminished capabilities. Even 5,000 proofs for the 2009 edition of the American Eagle coin series would offer a limited number to collectors that would still be a particularly rare year for the coin. When questioned by Coin World, a collectors' trade publication, about what would be the first skipped year in two decades for the American Eagle gold coin series, the Mint responded that they were just following the law, which is "to produce bullion coins in quantities sufficient to meet public demand."

The demand for gold bullion being 860% higher than it was a year ago, the Mint has found itself filling that demand with all the gold blanks that it can get its hands on. It is difficult to say how many licensed coin dealers are telling their customers they don't have what they need, but earlier this year, Ute Wartenberg Kagen, executive director of the American Numismatic Society, said she was asked by an investor how one could buy 10,000 coins (they are sold in ounce quantities and three fractional versions below that, at a price that is slightly above market value).

Gold bullion coin prices are normally nothing near the rare coin trade, in which the right coin can sell for anywhere between $50,000 and $1 million, but this year Treasury's business coin program is already selling at the explosive rates. In 1986, nearly 1.8 million ounces of gold bullion were sold. The Mint reports having sold 1.1 million ounces by the third week of November this year."