Bill in Congress REQUIRES the Secretary of the Treasury to mint a Palladium bullion coin.
CaptHenway
Posts: 32,144 ✭✭✭✭✭
Started this over on U.S. coins, but perhaps I should have posted it here.
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.
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.
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
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Comments
<< <i>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." >>
Secretary gets to determine if and how much just as before the change.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>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." >>
Secretary gets to determine if and how much just as before the change. >>
Yes, but he would be required to strike SOME, unlike the current situation where he has the option to strike NONE.
I am sure that the miners who bought the law do not care if the Treasury is forced to buy the metal, strike the coins and then sit on them.
Or what happens if he says "Fine! We'll strike 1,000 of them and that's it!" Instant demand that did not exist before, and another uncollectible U.S. coin.
<< <i>Well with zero and negative demand, how many u think they will mint???... >>
Good point. I can see some fairly low mintages in this coin's future.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Before "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."
After "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."
Note, the Secretary may determine whatever he or she thinks is appropriate, but isn't necessarily required to determine in favor of issuing the coin.
I knew it would happen.
The second just says he's gotta do it.
The second just says he's gotta do it.
I could always be wrong about this, but...
Both old and new versions state "shall issue" and "(a) in such quantities as the Secretary may determine to be appropriate to meet demand" but I don't interpret it to say that he's gotta do it.
What if he determines that it's not appropriate to mint the coins based on low demand?
Maybe they'll mint the coins, but I think it's still at the discretion of the Secretary, based on his evaluation of the demand. As much as I like low-mintage Modern Bullion coins, I don't think I'd be interested in palladium coins. Not very liquid and too large of a buy-sell spread, I think.
I knew it would happen.
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TD
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<< <i>Why are our bullion coin in the US .90 instead of .999 like the rest of the bullion coining nations? Not sure the reason unless there's a politician getting his wallet nourished by someone that owns a silver or base metal mine. >>
Our silver bullion coins are the American Eagles and the America The Beautiful five ounce hockey pucks. Both are .999 fine silver.
I knew it would happen.
Knowledge is the enemy of fear
Liberty: Parent of Science & Industry
Score a point for the palladium industry lobbyists
What next? A Rhodium coin?
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#2 1980 Topps Los Angeles Rams Team Set
#8 (and climbing) 1972 Topps Los Angeles Rams Team Set
I knew it would happen.
My Adolph A. Weinman signature
Was there anything about the packaging for the Buffalo gold coins as you suspected there might be?
Yes, that was included in the bill as passed. No word as to how they will package future ones to keep them from scratching. That is a serious retail problem with 24kt gold.
Assuming he chooses to issue any coins at all, the Secretary's initial guess as to the amount of demand is irrelevant. This is a bullion coin, and if the premium charged to dealers by the Mint is in line with premiums charged on the other PMs, the entire initial allocation will sell out fairly quickly. The Secretary likely will then revise his demand estimate upward and strike more. This would have been the case with platinum eagles also had the Mint been required to strike them to demand. The market had no problem absorbing the 16,900 platinum eagles issued in 2014, and premiums on all platinum eagles remain high due to unfulfilled demand.
Would the palladium coins be available for direct purchase?
Assuming he chooses to issue any coins at all, the Secretary's initial guess as to the amount of demand is irrelevant. This is a bullion coin, and if the premium charged to dealers by the Mint is in line with premiums charged on the other PMs, the entire initial allocation will sell out fairly quickly. The Secretary likely will then revise his demand estimate upward and strike more. This would have been the case with platinum eagles also had the Mint been required to strike them to demand. The market had no problem absorbing the 16,900 platinum eagles issued in 2014, and premiums on all platinum eagles remain high due to unfulfilled demand.
Would the palladium coins be available for direct purchase?
Like silver and gold, not any bulk bullion eagles. Any special collectors versions (i.e. proofs) would be available for direct mint purchase.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Assuming he chooses to issue any coins at all, the Secretary's initial guess as to the amount of demand is irrelevant. This is a bullion coin, and if the premium charged to dealers by the Mint is in line with premiums charged on the other PMs, the entire initial allocation will sell out fairly quickly. The Secretary likely will then revise his demand estimate upward and strike more. This would have been the case with platinum eagles also had the Mint been required to strike them to demand. The market had no problem absorbing the 16,900 platinum eagles issued in 2014, and premiums on all platinum eagles remain high due to unfulfilled demand.
Would the palladium coins be available for direct purchase?
Like silver and gold, not any bulk bullion eagles. Any special collectors versions (i.e. proofs) would be available for direct mint purchase.
The law also provides for the selling of what the Mint calls "Uncirculated" coins, which the hobby typically calls "Burnished Uncirculated." Such coins typically have a mint mark, while the bullion grade coins do not.
Generally I'm in favor of coins, but if this flies I don't see why they can't just go with a precious metals-based monetary system. Oh, wait. Never mind, for a minute there I lost my mind.
I knew it would happen.
So, we are potentially looking at 3 different 1 oz coins for each year?
Generally I'm in favor of coins, but if this flies I don't see why they can't just go with a precious metals-based monetary system. Oh, wait. Never mind, for a minute there I lost my mind.
The bullion grade Palladium ounce is required. The Proof and "Uncirculated" collectors versions are permitted. The Mint could issue one, two or three.
For the record, I own none.
My Adolph A. Weinman signature
Because they would Never circulate; dudes like us would insist on withdrawing them from circulation, hoarding them, putting them in albums, getting them slabbed, and selling them to each other for a profit
Liberty: Parent of Science & Industry
Knowledge is the enemy of fear
Verily, can you imagine a liquor store holdup if there is no cash?
I knew it would happen.
Verily. We don't even circulate zincolns.
Verily, can you imagine a liquor store holdup if there is no cash?
Sounds like you could be advocating a cashless society.
Knowledge is the enemy of fear
I'll be one of the last people to advocate that. Why donate to the banking system any more than necessary? Why leave a bigger trail for identity thieves than necessary?
I knew it would happen.
Verily. We don't even circulate zincolns.
Verily, can you imagine a liquor store holdup if there is no cash?
Sounds like you could be advocating a cashless society.
Dr Judd is rolling over in his grave laughing.
No word yet as to when the Mint will begin striking the one ounce palladium bullion coins.
My initial thoughts were to wait and see when the price of palladium suddenly spikes, then expect the new release. And for a few,,,, a huge windfall. And why coin dealers drink is anyone's guess.
http://www.coinworld.com/news/...n-us-mint-radar.1.html
I knew it would happen.
http://www.dailyfinance.com/qu...ter-mining-company/swc
Mint considering issuing fractional palladium coins as well. From Coin World:
http://www.coinworld.com/news/...n-us-mint-radar.1.html
"Although the original legislation authorizing the palladium coin also sought bullion versions, the Mint had pretty much abandoned the thought of producing bullion versions after a contracted feasibility study concluded the bullion palladium option would be unprofitable. The same study also concluded collector versions offered financial promise."
I would prefer the bullion coins. Proofs are gonna be a bit pricey for a pure bullion play.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey