Bill in Congress REQUIRES Secretary of the Treasury to strike Palladium bullion coins

CaptHenway · July 6, 2015 8:28AM

There has been talk about H.R. 1698, and the fact that it allows the government to change the fineness of existing .900 fine silver coins to a higher fineness. Some reports have it promoting .910 fine silver, but it does not actually say that. It just allows a higher but undefined fineness. Some reports say that it makes a Palladium bullion coin more possible and/or more likely.

However, in reading through the bill and plugging the proposed changes into the existing U.S. code, I see that it REQUIRES the Secretary of the Treasury to strike said Palladium coin.

Here is the existing U.S. Code on the Palladium bullion coin:

(v) Palladium Bullion Investment Coins. -
(1) In general. - Subject to the submission to the Secretary and the Congress of a marketing study described in paragraph (8), beginning not more than 1 year after the submission of the study to the Secretary and the Congress, the Secretary shall mint and issue the palladium coins described in paragraph (12) of subsection (a) in such quantities as the Secretary may determine to be appropriate to meet demand.
(2) Source of bullion. -
(A) In general. - The Secretary shall acquire bullion for the palladium coins issued under this subsection by purchase of palladium mined from natural deposits in the United States, or in a territory or possession of the United States, within 1 year after the month in which the ore from which it is derived was mined. If no such palladium is available or if it is not economically feasible to obtain such palladium, the Secretary may obtain palladium for the palladium coins described in paragraph (12) of subsection (a) from other available sources.

There is more, but these two paragraphs contain the important changes, which if you plug in the changes will read like this:

(v) Palladium Bullion Investment Coins. -
(1) In general. - The Secretary shall mint and issue the palladium coins described in paragraph (12) of subsection (a) in such quantities as the Secretary may determine to be appropriate to meet demand.
(2) Source of bullion. -
(A) In general. – To the greatest extent possible, the Secretary shall acquire bullion for the palladium coins issued under this subsection by purchase of palladium mined from natural deposits in the United States, or in a territory or possession of the United States, within 1 year after the month in which the ore from which it is derived was mined. If no such palladium is available or if it is not economically feasible to obtain such palladium, the Secretary may obtain palladium for the palladium coins described in paragraph (12) of subsection (a) from other available sources.

The study results are thrown out, and it would now say "The Secretary shall mint and issue the palladium coins described...." No ifs, ands or buts about it. He has to issue them.

There is an additional change in paragraph 5 that says Treasury "may issue collectible versions of..." the coins. Not as big an issue as the fact that the bill mandates the issuance of the coins in the first place.

The Bill has passed the House and is in the Senate, which has just returned from the Fourth of July break.

TD

Edited to add: Paragraph 8 of the current code states:

(8) Marketing study defined. - The market study described in paragraph (1) means an analysis of the market for palladium bullion investments conducted by a reputable, independent third party that demonstrates that there would be adequate demand for palladium bullion coins produced by the United States Mint to ensure that such coins could be minted and issued at no net cost to taxpayers.

H.R. 1698 strikes out Paragraph 8 completely, allowing the program to operate at a net cost to taxpayers.

LindeDad · July 6, 2015 8:37AM

And just who gets rich from this political boondoggle.

keyman64 · July 6, 2015 8:47AM

<< And just who gets rich from this political boondoggle.

>>

This!

But on the other end of the spectrum, maybe mintage will be low and there might be a little interest in obtaining an example of the first Palladium coin struck by the U.S. Mint?

CaptHenway · July 6, 2015 8:48AM

<< And just who gets rich from this political boondoggle.

>>

The only palladium mining company in the USA:

(couldn't get link to work)

https://en.wikipedia.org/wiki/Stillwater_Mining_Company

cameonut2011 · July 6, 2015 9:14AM

I am sure that the current administration will ignore and refuse to enforce the bill as it has done with other laws that it doesn't like and/or finds it convenient to go against the express statutory language.

ms70 · July 6, 2015 10:40AM

<< And just who gets rich from this political boondoggle.

>>

Exactly what I thought before I even got to your post.

WillieBoyd2 · July 6, 2015 11:15AM

Ooh that wicked "current administration"!

We had some people in my area get their palladium without waiting; they stole catalytic converters.

MsMorrisine · July 6, 2015 1:32PM

<< 

<< And just who gets rich from this political boondoggle.

>>

This!

But on the other end of the spectrum, maybe mintage will be low and there might be a little interest in obtaining an example of the first Palladium coin struck by the U.S. Mint? >>

buffoonery!
(I just wanted an excuse to use that word)

Overdate · July 6, 2015 1:47PM

<< And just who gets rich from this political boondoggle.

>>

If only a few thousand ounces of palladium bullion coins are sold each year, nobody's going to get rich.

Zoins · July 6, 2015 1:52PM

Here's a link to the Mint's 136-page Palladium Market Study which concludes:

<< It is unlikely that there will be sufficient demand for a U.S. Mint palladium bullion coin and such a program would most likely not be possible to undertake profitably.

It is unlikely that there will be sufficient demand for a U.S. Mint palladium numismatic (proof or uncirculated) coin, but such a program could be undertaken profitably. >>

The cover has photos of the Winged Liberty dime obverse and an eagle reverse. What do people think of the reverse?

CaptHenway · July 6, 2015 2:04PM

<< Here's a link to the Mint's 136-page Palladium Market Study which concludes:

<< It is unlikely that there will be sufficient demand for a U.S. Mint palladium bullion coin and such a program would most likely not be possible to undertake profitably.

It is unlikely that there will be sufficient demand for a U.S. Mint palladium numismatic (proof or uncirculated) coin, but such a program could be undertaken profitably. >>

The cover has photos of the Winged Liberty dime obverse and an eagle reverse. What do people think of the reverse? >>

Sounds like a certain mining company bought themselves a bill, since the original palladium legislation required the Mint study and the new bill takes out that requirement.

The text of the bill is very sneakily written. It removes the study requirement without ever mentioning the study requirement, by stating

"Title 31, United States Code, is amended--
(1) in Section 5112
(C) in subsection (v)--
(i) in paragraph (1), by striking "Subject to" and all that follows through 'the Secretary shall' and inserting 'The Secretary shall';"

The study requirement is included in that unnamed "and all that follows." Whoever wrote the bill must have figured that nobody would ever read the original to see what was being deleted.

TD

Zoins · July 6, 2015 2:11PM

It's interesting that the Mint commissioned Market Report concluded that palladium bullion coins would not be profitable and HR 1698 is called a Cost Savings Act with the following name:

H.R.1698 - Bullion and Collectible Coin Production Efficiency and Cost Savings Act

CaptHenway · July 6, 2015 2:42PM

<< It's interesting that the Mint commissioned Market Report concluded that palladium bullion coins would not be profitable and HR 1698 is called a Cost Savings Act with the following name:

H.R.1698 - Bullion and Collectible Coin Production Efficiency and Cost Savings Act >>

Yes, and if you look at the bottom of that summary it states:

"Technical revisions are made to the requirements for palladium bullion investment coins."

Yeah, it removes the law that says if there is no market for them don't make them, and says that the Treasury MUST make them!

I think that was the whole purpose of this bill, to smooch the U.S. palladium miner. All the other folderol is just smokescreen.

Included in the folderol is a provision that removes the Secretary of the Treasury's right to change the design of the gold eagle program. Why? I don't know.

TD

CaptHenway · July 6, 2015 2:46PM

Here is a statement put out about the bill:

link

Notice the insane statement that .910 fine silver is the standard coinage alloy around the world.

CaptHenway · July 6, 2015 11:35PM

<< It's interesting that the Mint commissioned Market Report concluded that palladium bullion coins would not be profitable and HR 1698 is called a Cost Savings Act with the following name:

H.R.1698 - Bullion and Collectible Coin Production Efficiency and Cost Savings Act >>

Yes. See my revised OP about the Bill removing the provision that the coins be made at no net cost to the taxpayers! They don't care how much money this costs us, the taxpayers, so long as the miners get to sell their product!

Sounds like the 1878 Bland-Allison Act!

TwoSides2aCoin · July 6, 2015 11:41PM

We also have a bill in Congress (iirc) to make the silver commemoratives with more silver from .900 to .910 fineness.
Good news 'round the bend.

BillJones · July 6, 2015 11:45PM

"If you mint it, they will come."

Well not necessarily. I have long given up on keeping up with everything the mint sells these days. You are a somewhat well to do collector, as I am, you won't have any money left to buy anything else. If you are average collector with a respectable budget, you would soon max out your credit cards and would be going to bankruptcy court or the credit counselor.

Palladium has absolutely nothing to do with the history of U.S. numismaitcs. So why do we need this thing?

CaptHenway · December 10, 2015 3:59AM

Well, the bill requiring the palladium bullion coin to be struck just passed as a rider to the recent Transportation Act. Signed into law Dec. 4. I will be writing about this in COINage.

TD

19Lyds · December 10, 2015 4:35AM

Originally posted by: CaptHenway

Well, the bill requiring the palladium bullion coin to be struck just passed as a rider to the recent Transportation Act. Signed into law Dec. 4. I will be writing about this in COINage.

TD

I predict HUGE profits, right out of the gate!

And then?

And then?

"And then along came Jones

Tall, thin Jones

Slow-walkin' Jones

Slow-talkin' Jones

Along came long, lean, lanky Jones"

I smell Gold Bullion Kennedy's in the air!

Dentuck · December 10, 2015 5:08AM

The secretary of the Treasury already had the authority to change gold designs, didn't he? Hence the 2015 American Liberty, for example.

As for this: "in such quantities as the Secretary may determine to be appropriate to meet demand" ... couldn't he simply determine that a quantity of zero is "appropriate"? Not to determine that demand is zero, but to determine that it would not be appropriate (translated as "cost-efficient," "logical," "prudent," or what-have-you) to issue the coins, due to very low demand.

keyman64 · December 10, 2015 5:20AM

Oh boy...more material for the mint to pump out.

CaptHenway · December 10, 2015 5:32AM

Originally posted by: Dentuck

The secretary of the Treasury already had the authority to change gold designs, didn't he? Hence the 2015 American Liberty, for example.

As for this: "in such quantities as the Secretary may determine to be appropriate to meet demand" ... couldn't he simply determine that a quantity of zero is "appropriate"? Not to determine that demand is zero, but to determine that it would not be appropriate (translated as "cost-efficient," "logical," "prudent," or what-have-you) to issue the coins, due to very low demand.

The original act had the caveat that the Secretary could look at that market study and then, if he thought it a good idea, strike the coins. The new bill removes the caveat that says he can look at the study first. It just says that "(he) shall strike the coins." He no longer has a say in the matter.

CaptHenway · December 10, 2015 10:52AM

Trying to edit the title of the thread and I keep getting "Error Code 113." Sigh.

Dentuck · December 10, 2015 12:49PM

Capt.,

I might be reading your original post wrong. I interpret this:

(1) In general. - The Secretary shall mint and issue the palladium coins described in paragraph (12) of subsection (a) in such quantities as the Secretary may determine to be appropriate to meet demand.

to mean that the Secretary has the option to determine the appropriate quantity to be zero?

Dentuck · December 10, 2015 12:53PM

He could theoretically come to that determination by saying (making these numbers up for the example):

number of potential annual buyers, anticipated number of ounces purchased per buyer, etc. = 2,000 ounces per year

profit per ounce = $120 x 2,000 = $240,000 per year

anticipated expenses = $475,000 per year

anticipated loss = $235,000 per year

Final determination: expenses exceed profit = it would be appropriate to mint zero coins

Dentuck · December 10, 2015 1:02PM

No, I'm reading that wrong. The legislated intent is to meet demand, not to necessarily make a profit.... I think?

CaptHenway · December 10, 2015 2:44PM

Originally posted by: Dentuck

No, I'm reading that wrong. The legislated intent is to meet demand, not to necessarily make a profit.... I think?

That's how I read it. They have to make the pieces subject to demand. They do not have to turn a profit.

Dentuck · December 11, 2015 1:18AM

Yikes. With typical advertising campaigns running into the millions of dollars, plus other normal operating expenses, will this end up being a "costs ten cents to mint a nickel" situation?

CaptHenway · December 11, 2015 3:45AM

Hard to say. They presumably break even on the gold half eagles which have low sales each year, but they have been able to amortize the design expenses over 30 years so far.

CaptHenway · February 24, 2016 11:54AM

Mint considers issuing fractional palladium coins as well. From Coin World:

http://www.coinworld.com/news/...n-us-mint-radar.1.html

RichieURich · February 24, 2016 12:14PM

It's no wonder that many people have a low opinion of Congress, when they pass legislation like this that is just a payoff to a well-connected company.

And anyone who examines this legislation will arrive at the same dismal conclusion.

CaptHenway · March 1, 2016 1:52AM

Palladium up $28 as I speak.

newnotes · March 3, 2016 1:39AM

And another 22.00 today (so far).

CaptHenway · March 4, 2016 2:40AM

Stillwater Mining, which is the only company that can sell palladium to the U.S. Mint, seems to be doing well also.

CaptHenway · March 6, 2016 10:15AM

The Coin World Online that came out Saturday has a good article and a good editorial on the new U.S. palladium coins.

Zoins · March 6, 2016 10:22AM

Obverse and reverse designs from CoinWorld:

BStrauss3 · March 6, 2016 10:55AM

I'm pretty sure other legal provisions require the mint to recover costs on bullion and commem coinage. So total up the marketing costs, die costs, etc. divide that by 100 coins and let them sell out or not. At spot plus $500, could be a long time.

CaptHenway · March 17, 2016 2:22AM

Palladium up to $591. I wonder if the Mint has bought in yet?

CaptHenway · April 30, 2016 4:46AM

Palladium up to $621.

Tassa · April 30, 2016 6:22AM

I hope it keeps going up. I am sitting on more than I want to be right now. I kind of like Palladium and think a US Palladium coin would be kind of cool, but I don't see much demand for that metal. I get maybe two calls a year from someone wanting to buy a Palladium bar or coin.

Zoins · September 16, 2017 10:07PM

@Zoins said:
Here's a link to the Mint's 136-page Palladium Market Study which concludes:

It is unlikely that there will be sufficient demand for a U.S. Mint palladium bullion coin and such a program would most likely not be possible to undertake profitably.

It is unlikely that there will be sufficient demand for a U.S. Mint palladium numismatic (proof or uncirculated) coin, but such a program could be undertaken profitably.

Looks like the Palladium Study is no longer on the Mint website but luckily it's available on the Wayback Machine:

https://web.archive.org/web/20130704030306/http://www.usmint.gov/about_the_mint/PDFs/PO87001_PalladiumStudy.pdf

Gluggo · September 16, 2017 10:23PM

@BillJones said:
"If you mint it, they will come."

Well not necessarily. I have long given up on keeping up with everything the mint sells these days. You are a somewhat well to do collector, as I am, you won't have any money left to buy anything else. If you are average collector with a respectable budget, you would soon max out your credit cards and would be going to bankruptcy court or the credit counselor.

Palladium has absolutely nothing to do with the history of U.S. numismaitcs. So why do we need this thing?

Its funny you should mention this as I just took out a loan to pay for all the coins I purchased! Wow I do have a sickness!

cameonut2011 · September 16, 2017 11:14PM

I wonder what the issue price will be for the coins.

ricko · September 17, 2017 8:48AM

Will a U.S. palladium coin ever become a reality? It seems to be just dragging on...I would like to see one and hold it.... should be interesting...Cheers, RickO

cameonut2011 · September 17, 2017 9:47AM

@ricko said:
Will a U.S. palladium coin ever become a reality? It seems to be just dragging on...I would like to see one and hold it.... should be interesting...Cheers, RickO

The pieces are supposedly being offered to select distributors sometime this month. A proof will come out next year.

cameonut2011 · September 17, 2017 9:48AM

http://www.coinworld.com/news/precious-metals/2017/08/u-s-mint-to-start-selling-palladium-bullion-coins-in-september.all.html

ricko · September 17, 2017 10:35AM

@cameonut2011.... Thanks... guess I should have checked around a bit before making that statement... Cheers, RickO

Bill in Congress REQUIRES Secretary of the Treasury to strike Palladium bullion coins

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