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Speaking of the spread of silver eagles over spot, let's talk about Authorized Purchasers

HigashiyamaHigashiyama Posts: 2,121 ✭✭✭✭✭

Although there is a lot of logic to the mint's distribution system for precious metal coins, shouldn't the mint reconsider the concept of a fixed spread (currently US$ 2.35 for silver eagles, or 3 % for gold eagles) over spot in sales to authorized purchasers? Clearly, for silver eagles, these dealers are making a bit of a windfall in the current environment, without taking additional risk or providing enhanced distribution services.

In particularly, should the mint either (a) change the required spread over spot periodically, for example, weekly or monthly, or (b) establish an auction process, similar to treasuries, where buyers bid periodically on a well-defined number of coins for sale?

Even though it is trivial compared to our overall debt, there's no reason the US government should leave this money on the table.

Higashiyama

Comments

  • derrybderryb Posts: 36,006 ✭✭✭✭✭

    List of AP's.

    The result would likely be much higher wholesale and ultimately retail prices. Look what the mint's pricing method/matrix has done to what we pay for PM products bought directly from the mint.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • HigashiyamaHigashiyama Posts: 2,121 ✭✭✭✭✭

    Possibly, though I have assumed (without any real analysis) that the recent increases in spread over spot are driven by retail demand rather than the pricing power of the big distributors. If my original assertion about a “windfall” is generally correct, a change in the mint’s pricing strategy should shift some of this windfall to the government without having a significant impact on price.

    (Slightly related question—if premiums on silver eagles continue to increase, at what point will competition from the better quality silver rounds put a damper on silver eagle premiums?)

    Higashiyama
  • MsMorrisineMsMorrisine Posts: 32,001 ✭✭✭✭✭

    if they had to pay an increased premium to the mint, I think they'd just pass it on to the consumers

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • carew4mecarew4me Posts: 3,459 ✭✭✭✭

    So direct US MInt bullion sales to the Plebes then. Ok to have a minimum purchase of 100 OZ or 500 Oz monster box.


    Loves me some shiny!
  • derrybderryb Posts: 36,006 ✭✭✭✭✭

    @carew4me said:
    So direct US MInt bullion sales to the Plebes then. Ok to have a minimum purchase of 100 OZ or 500 Oz monster box.

    APs have to take care of delivery costs from the mint.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • carew4mecarew4me Posts: 3,459 ✭✭✭✭

    @derryb said:

    @carew4me said:
    So direct US MInt bullion sales to the Plebes then. Ok to have a minimum purchase of 100 OZ or 500 Oz monster box.

    APs have to take care of delivery costs from the mint.

    hmmm..I wonder if the US Mint could partner with another Gov agency to deliver US government bullion to the masses?
    Hopefully there is some government entity out there that can deliver a package? :)
    Lets demand that a country built on wealth generation and preservation allow its citizens to purchase US minted bullion and
    tax free too!


    Loves me some shiny!
  • cohodkcohodk Posts: 18,487 ✭✭✭✭✭

    @carew4me said:
    So direct US MInt bullion sales to the Plebes then. Ok to have a minimum purchase of 100 OZ or 500 Oz monster box.

    My thought also. However, are the Plebes only interested in 5 to 10 oz? Are there many real "stackers" who would buy a dozen monster boxes? I know there are a few on this forum, but how to get J6P to buy?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • blitzdudeblitzdude Posts: 5,263 ✭✭✭✭✭

    @carew4me said:
    So direct US MInt bullion sales to the Plebes then. Ok to have a minimum purchase of 100 OZ or 500 Oz monster box.

    Haven't you heard? There is a massive silver shortage. The mint has no gutter to sell to the plebes. lol

    The whole worlds off its rocker, buy Gold™.

  • TwoSides2aCoinTwoSides2aCoin Posts: 43,743 ✭✭✭✭✭
    edited May 5, 2021 8:50AM

    I buy from one of them. Slowest shippers in the world. Premiums as high as eBay. (almost).

  • carew4mecarew4me Posts: 3,459 ✭✭✭✭

    @cohodk said:

    @carew4me said:
    So direct US MInt bullion sales to the Plebes then. Ok to have a minimum purchase of 100 OZ or 500 Oz monster box.

    My thought also. However, are the Plebes only interested in 5 to 10 oz? Are there many real "stackers" who would buy a dozen monster boxes? I know there are a few on this forum, but how to get J6P to buy?

    at US$ 2.35 over spot per...that is how.


    Loves me some shiny!
  • derrybderryb Posts: 36,006 ✭✭✭✭✭
    edited May 5, 2021 10:07AM

    @carew4me said:

    @cohodk said:

    @carew4me said:
    So direct US MInt bullion sales to the Plebes then. Ok to have a minimum purchase of 100 OZ or 500 Oz monster box.

    My thought also. However, are the Plebes only interested in 5 to 10 oz? Are there many real "stackers" who would buy a dozen monster boxes? I know there are a few on this forum, but how to get J6P to buy?

    at US$ 2.35 over spot per...that is how.

    and premiums would then drop and spot would regain it's full control as the physical pricing mechanism.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • carew4mecarew4me Posts: 3,459 ✭✭✭✭

    Why do I have to pay a $3000 APMEX private company tax on a monster box to purchase US Bullion issued by my government?
    Why can't I purchase that MB from the US Mint at the rate they have established for hand picked lottery winners?
    The US Mint can ship 1,000,000 2021 Peace/Morgans issues but not a MB or roll of AGE?


    Loves me some shiny!
  • derrybderryb Posts: 36,006 ✭✭✭✭✭
    edited May 5, 2021 1:20PM

    The mint sold over 30 million ASEs in 2020. It could not handle the volume if it allowed individual purchases of bullion eagles. They would have to charge a much higher premium to put the logistics in place for such volume. Their rate to APs is not a lottery. AP's have to meet very strict financial requirements to become an AP wholesale buyer. That is why there are only 10 of them. Mint does not provide shipping to APs, APs have to arrange pickup from the mint.

    That is why you have to pay the private tax to APMEX.

    Note the markup on the gold and silver that you CAN buy from the mint. You wanna pay that kinda premium for a tube or box of ASEs?

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • MsMorrisineMsMorrisine Posts: 32,001 ✭✭✭✭✭

    The other purpose for the APs is they have to create a market for them.

    While no one says they have to buy a good prices, they do have to buy them from the public.

    It’s a bit more complicated than just selling direct. And as indicated, premiums selling to the public wouldn’t allow for $2.50 over deals on eBay.

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • meluaufeetmeluaufeet Posts: 746 ✭✭✭

    I thought the USMint does change the spot+ to AP's from time to time. I'd like to see them sell silver monsters directly to us, HH limit 1 is fine for me.

  • carew4mecarew4me Posts: 3,459 ✭✭✭✭

    There is no reason that the US Mint could not sell MBs to the public. None. And the cost would be much lower than APs.


    Loves me some shiny!
  • derrybderryb Posts: 36,006 ✭✭✭✭✭
    edited May 6, 2021 5:30AM

    @carew4me said:
    There is no reason that the US Mint could not sell MBs to the public. None. And the cost would be much lower than APs.

    The increased logistics required to ship last year's 60,000 MBs and pay the mint's contracted fulfillment center to get them to customers would likely have MB buyers wishing they would return to the old system that made them cheaper.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • blitzdudeblitzdude Posts: 5,263 ✭✭✭✭✭

    @derryb said:

    @carew4me said:
    There is no reason that the US Mint could not sell MBs to the public. None. And the cost would be much lower than APs.

    The increased logistics required to ship last year's 60,000 MBs and pay the mint's contracted fulfillment center to get them to customers would likely have MB buyers wishing they would return to the old system that made them cheaper.

    Contract Amazon to handle the logistics. They could certainly do it cheaper and more efficient than the Mint ever could. It is BSs that the mint only deals with the APs at a set price yet the APs can rob the public with outrageous premiums.

    The whole worlds off its rocker, buy Gold™.

  • derrybderryb Posts: 36,006 ✭✭✭✭✭

    Then you should become an AP: Guttermetal Coin and Bullion. There's a reason wholesalers (the mint in this case) choose not to be retailers. Maybe you can convince your local Sam's Club to sell ASEs in bulk.

    When I don't like the price of something I just don't buy it.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • carew4mecarew4me Posts: 3,459 ✭✭✭✭
    edited May 6, 2021 1:06PM

    @derryb said:

    @carew4me said:
    There is no reason that the US Mint could not sell MBs to the public. None. And the cost would be much lower than APs.

    The increased logistics required to ship last year's 60,000 MBs and pay the mint's contracted fulfillment center to get them to customers would likely have MB buyers wishing they would return to the old system that made them cheaper.

    conjecture and opinion.

    fact:
    -the US Mint makes the product, the US Mint wants to move the product
    -the US Mint ships many, many other products already..shipping is not new to the US Mint (they originally had a 100 HHL limit on the 2021 Peace/Morgan issue , only lowered by public outcry , so approx 100 oz (I know they weigh less) was easy ca-peasy to the US Min_t)
    -the AP program makes 0 sense, an middleman layer of cost _that ONLY exist for the bullion issues

    -many dealers buy 100 5 Oz pucks...no problem for the US Mint to ship, click away ..add a mountain of product to your cart
    -I'll pay $75+ to ship a MB rather than $1000-$3000$5000+ private lottery winner tax/fee/BS
    -a formerly capitalist county like the US should see the value of stream lining bullion into the homes of its citizens, just like a Bond, TIPS etc (instead they stream line unfathomable debt to our kids)


    Loves me some shiny!
  • derrybderryb Posts: 36,006 ✭✭✭✭✭
    edited May 6, 2021 2:21PM

    fact:
    If the mint sells 47 lb boxes of ASEs to the public, they will do so through a new middleman - their contracted fulfillment center. Do you really think it will cost you less to go through the a government contracted middleman? As it stands the APs take all the risk with what they pre-order (spot does down you know), and pay all the delivery costs. Not one of the ten APs has a monopoly on ASEs, they have to compete with each other to make sales to the retailers who are actually the party making you pay what you think is too much. APMEX is an exception as they are an AP and a retailer, so yes, they should be cheaper than others. Buyers, not APs determine final ASE retail price.

    Compare the markup on what you currently get through the mint's fulfillment center and what you now pay for a tube of ASEs. Do you really want to pay more for them?

    High premiums on the secondary market are normally temporary and simply a result of supply and demand. Don't assume you can get them cheaper from the mint through their contracted (yes, they work for profit) fulfillment center.

    Sure, I'd like to buy gas from the refinery, but that's not how wholesale works. And if the refinery had to deal with a thousand auto fill ups instead of one big truck fill up you can bet the autos would pay a lot more per gallon than the single truck for the gas taken from the refinery.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • meluaufeetmeluaufeet Posts: 746 ✭✭✭

    I was thinking about the $4.95 ship lol

  • MsMorrisineMsMorrisine Posts: 32,001 ✭✭✭✭✭

    @meluaufeet said:
    I was thinking about the $4.95 ship lol

    You know, if they rearranged the tubes they could design a MB to fit inside a large flat rate box. but with the value of a MB you’d get a free UPS upgrade! :D

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
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