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."
Showing posts with label Storage. Show all posts
Showing posts with label Storage. Show all posts
A Case For Stockpiling: Should Food Be In Your Portfolio?
I know, it sounds weird to think about but should you consider food in your portfolio? Not companies that produce food like Conagra and Kraft, but actual literal, bust open the can and heat it up food. I am being slightly facetious as I know it is not considered an investment by any orthodox standard, but think about it. It has all of the fundamentals stacked against it: Increasing wages, increasing transport cost, increasing population, scarcity, susceptible to natural disaster, inflation, and the slightest disruption in the supply chain and the price shoots up nearly over night!
Consider: very few cities are well equipped for food production. Nearly the entire population depends on large truckloads of food to be delivered to super markets on a daily basis! Consider all of the above examples such as scarcity, susceptibility, and it is a surprise that crises do not occur on a daily basis in the same places. What am I getting at? Well, in case you have been asleep at the wheel, America is not getting more stable.
Just yesterday the FDIC admitted to being in the red by 8.2 billion, droves of people watch FDIC.gov every Friday to see if they have won the "How many banks will fail tonight" bet, Eliot Spitzer just called the Fed a ponzi scheme, China is angry at our fiscal policy, senators are calling for Timothy Geithner to step down, California is basically printing their own currency, Iran and Israel are going at one another like Spy vs. Spy, Gold is at new highs, 14.1% of ALL US mortgages are either in foreclosure or delinquency, and half a million Americans lose their jobs each month. If you think that sounds stable then I will have a drink of what you're having.
So, by stocking up on non-perishable food, you could avoid inflation, the additional transportation cost (fewer grocery trips), panic buying during disaster, waiting for trucks to bring stuff in, and a few other things that make this proposition look mighty tempting. It is just an idea to consider.
Consider: very few cities are well equipped for food production. Nearly the entire population depends on large truckloads of food to be delivered to super markets on a daily basis! Consider all of the above examples such as scarcity, susceptibility, and it is a surprise that crises do not occur on a daily basis in the same places. What am I getting at? Well, in case you have been asleep at the wheel, America is not getting more stable.
Just yesterday the FDIC admitted to being in the red by 8.2 billion, droves of people watch FDIC.gov every Friday to see if they have won the "How many banks will fail tonight" bet, Eliot Spitzer just called the Fed a ponzi scheme, China is angry at our fiscal policy, senators are calling for Timothy Geithner to step down, California is basically printing their own currency, Iran and Israel are going at one another like Spy vs. Spy, Gold is at new highs, 14.1% of ALL US mortgages are either in foreclosure or delinquency, and half a million Americans lose their jobs each month. If you think that sounds stable then I will have a drink of what you're having.
So, by stocking up on non-perishable food, you could avoid inflation, the additional transportation cost (fewer grocery trips), panic buying during disaster, waiting for trucks to bring stuff in, and a few other things that make this proposition look mighty tempting. It is just an idea to consider.
