Ed Moy's book on gold and platinum eagles
Stephon
Posts: 10
I recently bought Ed Moy's book on gold and platinum eagles and found it to be a very interesting and insightful read. The background information given in this book is in some ways better than the Bowers series books which Whitman published. There is one thing that did get my head scratching in Moy's book:
How does the mint price its numismatic products just enough to break even (plus a small margin to cover any potential losses so that taxpayers wouldn't have to subsidize collector purchases)? I find that hard to believe with the way the mint overprices their numismatic products. Why does the mint even make numismatic products and go crazy with the amount of products that they make to collectors if they're not really making any money, if any, off of it? If the mint isn't making money and going out of control with the amount of products that they come up with for collectors, then there really needs to be some reforms made over there.
How does the mint price its numismatic products just enough to break even (plus a small margin to cover any potential losses so that taxpayers wouldn't have to subsidize collector purchases)? I find that hard to believe with the way the mint overprices their numismatic products. Why does the mint even make numismatic products and go crazy with the amount of products that they make to collectors if they're not really making any money, if any, off of it? If the mint isn't making money and going out of control with the amount of products that they come up with for collectors, then there really needs to be some reforms made over there.
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<< <i>I recently bought Ed Moy's book on gold and platinum eagles and found it to be a very interesting and insightful read. The background information given in this book is in some ways better than the Bowers series books which Whitman published. There is one thing that did get my head scratching in Moy's book:
How does the mint price its numismatic products just enough to break even (plus a small margin to cover any potential losses so that taxpayers wouldn't have to subsidize collector purchases)? I find that hard to believe with the way the mint overprices their numismatic products. Why does the mint even make numismatic products and go crazy with the amount of products that they make to collectors if they're not really making any money, if any, off of it? If the mint isn't making money and going out of control with the amount of products that they come up with for collectors, then there really needs to be some reforms made over there. >>
Read the US Mint Annual Reports.
I'm sure you'll see that the US Mint is making lots of profits which enable it to pay for itself without Tax Subsidies AND turn MILLIONS over to the General Fund to pay down the National Debt.
Regardless of what Ed Moy may imply in his book!
You want to know something else?
Well I'll tell you anyway.
Edmund Moy doesn't know squat about US Coins or coin making. His specialty was Human Resources and he was "appointed" to the Job as US Mint Director in response to political favors. I would think that he is much qualified to speak about coins as the CEO of General Motors.
The name is LEE!
In the past overall profit margin target was something like 15%. The past couple of year's they've exceeded it and it be nice to see a bit lower prices were a touch lower
Note: mint set margins are in the 3% area.
The premium products would be precious metals products.
<< <i>Without context, I'm inclined to say the question was rhetorical and rhetorically asked to respond to complaints of profiteering.
In the past overall profit margin target was something like 15%. The past couple of year's they've exceeded it and it be nice to see a bit lower prices were a touch lower
Note: mint set margins are in the 3% area.
The premium products would be precious metals products. >>
The questions that I asked were intended to be part actual question and in a small part rhetorical in nature. If someone had an answer to my question, that would be great, as I was wondering how the mint prices its products to break even too.
Any accountant will tell you that numbers can be manipulated with regard to cost / price. How you allocate overhead is particularly tricky as you have numismatic and circulating coins being made in the same facilities.
Bullion coins have a sliding scale based upon the denomination, the lowest being one ounce and highest being 1/10 ounce. My foggy memory recalls 3% for one ounce gold bullion, but I could be wrong.
Their overall net profit margin target is like 15%
The lowest margin products are the various mint sets that go on the 3% range.
Precious metals products pull down a higher profit margin.
It would be nice if they would lower those margins. I need it.
Google mint annual report and have a read in the numismatic products section. It won't tell you how but it does tell you how much.
SAEs were a very nice coin when silver was below $5. Now the metal cost alone is $20. For proof coins it has really pushed the prices out of reach of many collectors.
Two other points I like to make, the products produced and sold by the Mint are determined by Congress, not the Mint in terms of what is produced. The Mint is non appropriated, thus they are financially self sufficient taking not a dollar for operations from the government and at the end of the year they return 100s of millions of dollars to Treasury's general fund. So much for my commercial, LOL
100% Positive BST transactions
<< <i>I believe the US Gov. still has Fort Knox gold on the "books" at $35 and ounce. Newly mined Gold is a different story. >>
The statutory maximum declared valuation for gold and silver are also in the annual report. This figure is used for both deep storage gold like at Fort Knox and the ny fed, but also the mint's working stock.
<< <i>
<< <i>I believe the US Gov. still has Fort Knox gold on the "books" at $35 and ounce. Newly mined Gold is a different story. >>
The statutory maximum declared valuation for gold and silver are also in the annual report. This figure is used for both deep storage gold like at Fort Knox and the ny fed, but also the mint's working stock. >>
Ahhhh! Ft. Knox!
I would be curious as to how much gold is actually left in Ft. Know since the Gold Bullion Act of 1985 specifically states:
“(3) The Secretary shall acquire gold for the coins issued under section 5112(i) of this title by purchase of gold mined from natural deposits in the United States, or in a territory or possession of the United States, within one year after the month in which the ore from which it is derived was mined. The Secretary shall pay not more than the average world price for the gold. In the absence of available supplies of such gold at the average world price, the Secretary may use gold from reserves held by the United States to mint the coins issued under section 5112(i) of this title. The Secretary shall issue such regulations as may be necessary to carry out this paragraph”.
The name is LEE!
There is a photo in the FY2013 report showing the working stock at west point. I once estimated they used more than that amount in a year (AGE: bullion & numismatic, Buffs: b&n, First Spouses, and Commemoratives + any other like congressional gold medals) It's a fairly large amount... like 1million troy. I'll have to check when I'm checking the reports for deep storage numbers.
<< <i>The Fed Res holds written pledges for the statutory value of some large portion, if not all, of the Treasury's stored gold as collateral to back that same amount of federal reserve notes. I'd have to look at at least two reports (first available and the most recent) to see if the deep stoarge numbers have changed at all.
There is a photo in the FY2013 report showing the working stock at west point. I once estimated they used more than that amount in a year (AGE: bullion & numismatic, Buffs: b&n, First Spouses, and Commemoratives + any other like congressional gold medals) It's a fairly large amount... like 1million troy. I'll have to check when I'm checking the reports for deep storage numbers. >>
Good.
It should be noted that the source of gold and soilver for the bullion programs were the Strategic Stockpile Reserves. Other gold and silver must be mined and processed within the United States. Typically, the Treasury Department has contracts with Silver and Gold producers for specific amounts at specific values.
The name is LEE!
the 2013 Mint's annual report shows $10,355,539,000 in deep storage at statutory values
in the 2001 report it shows the same number for both 2001 and 2000.
I cannot explain the difference between the Fed's numbers and the mint's but the NY Fed says none of the gold they hold belongs to them.
Treasury allows the Mint to use some of its gold as working stock in the production of gold coins. This
allows the bureau to avoid the market risk associated with buying gold far in advance of the sales date
of the gold coins. The Mint replenishes the Treasury gold working stock at or just prior to the time the
coins are sold. Generally, the bureau does not deplete the working stock used in production. Instead,
the Mint will purchase a like amount of gold on the open market to replace the working stock used.
Treasury also allows the Mint to use silver as working stock. However, Treasury does not have enough
silver to fulfill all bureau manufacturing needs. Accordingly, for the purpose of avoiding market risk
associated with owning silver, the Mint has entered into a silver hedging arrangement.