How does the Govt get metals from to make Eagles (gold,silver)?
psxchelly
Posts: 568 ✭✭
I have always wondered this... and now that gold and silver is so high I wanted to see if anyone can answer my questions.
Does the government just buy silver from the best bidder? or is there a particular company that the government only buys from?
Or does the govt have its own mines?
sorry if the questions seem silly. I have always just wondered and thought I would ask.
Michelle
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Comments
When the COMSTOCK Lode was discovered and mined in the late 1800's....the mine owners made a big push to sell the silver to the GOVT.
If memory serves me, in 1919, The Pittman Act melted down about 50 million ounces of silver and in 1921 they started recoining Morgans and then started the Peace series to use it up. They had so much silver to get rid of and the best way to do it was in silver dollars and that is why the Walkers had such low mintages in the early 20's.
Robert A. Heinlein
have begun this process but I've heard of no actual sales.
I was thinking that they might melt coins. I would be surprised if they didnt try the open market. Would the govt really have some storage area for tons and tons of metals?
Michelle
Well, besides Fort Knox. . .
But seriously...
The US Government used to maintain a strategic stockpile of silver (just as they do of petroleum and other strategic materials), but when the Silver Eagle enabling legislation was passed, the Mint was directed to use the stockpile for making the Silver Eagles, as the Government determined that there were sufficient supplies of silver available on the open market and it didn't need to maintain a silver stockpile anymore. A couple of years ago (I think) it was reported in Coin World that the Mint was about to exhaust the stockpile and would thereafter purchase silver on the open market for use in the Silver Eagle program.
By the way, the Mint's program of open market purchases is why they only sell Unc. Silver Eagles to the Authorized Purchasers: It wants to get the silver in, turn it into coins and sell the coins with minimal exposure to fluctuations in the market price of silver. That's also why they sell Silver Eagles to Authorized Purchasers at the Spot Price plus a premium.
If you read the enabling legislation for the recent commemorative coin programs, I believe that you'll see that sometimes Congress will direct the Mint to purchase "newly mined domestic" Silver and Gold for use in minting the coins authorized by that legislation.
Also, the Mint used to melt silver coins in order to recycle their silver content, but they really haven't done that since silver coins disappeared from circulation in the late 1960s.
Check out the Southern Gold Society
go into the "Gold Room", where they store the gold bars used to make
American Gold Eagles.
Most of the Bars were from Englehard in Canada...purchased directly from
them, I was told.......
Fred
I would think they keep it fairly quiet that they are out there purchasing bullion, no need to have a rise in prices just because of that.....
At the Franklin Mint, if they had a 10 year medallion or ingot program, that bought all of the silver needed on day 1 and asked for monthly shipments for the next 10 years. The marketing people were pretty accurate with regard to subscriber attrition, and the silver accounting department kept track of all of the purchases for all of the programs. If some silver medallions were better sellers than others, the silver accounting department would adjust the reserves between programs accordingly.
Joe