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Gold Bullion Bar Supply Crunch for US Mint

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by jhanders
Wednesday, Sep 08, 2021 - 22:15

The US Mint has already just hit record gold bullion coin sales for the year 2021 in terms of overall fiat Fed note revenue.

At this rate, this gold-colored bar on this chart below is on pace to go near $3 billion by the year’s end. 

Below our latest video update embed, we'll explain why that likely won't happen.

Gold Bullion Bar Supply Crunch for the US Mint

“The US Mint is playing an elaborate game of "Chicken or Egg" as it relates to selling low premium gold bullion coins to their AP network in high volumes. 

Historically, the US Mint purchases large raw gold bullion bars from any number of sources and uses other vendors to produce the 22k & 24k planchets. The US Mint stamps and strikes bullion American Gold Eagle, Buffalo coins with those planchets.

Each raw gold bullion bar and planchet purchase comes with a set some very strict explicit standard terms of delivery (which have not changed over time) that binds the seller to specific terms, and failure of the seller to meet those terms agreed to with the US Mint, is very costly. 

The US Mint is now quoting unexpected delays on their products, notably pointing to the lack of supply of the raw gold bullion bars being offered to them. 

Considering the suppliers of the raw gold bullion bars are often the same parties buying the finished bullion coin products, it's an odd phenomenon where each party is in some sense biting the hand that feeds them and or at least shirking their respective shortcomings.

The main reason for this development is that it's too costly for suppliers to agree to a delivery schedule to the US Mint, as the supply of raw 400 oz gold bullion bars itself is not as reliable, as it always has been.

Gold US Mint suppliers are worried that they may not be able to meet the schedule in which massive fines/penalties are imposed in such an occurrence.

The BOTTOM line is… the US Treasury and US Mint cannot keep up with rising public global demand for their bullion coin products.

This is much in part why the US Treasury got the original 1986 bullion coin act terms amended in the 2010 Dodd-Frank Act. Now Janet Yellen deems by fiat decree what amount of gold and silver bullion coins are efficient to meet ongoing demand, not actual public demand as the US Treasury and US Mint were once officially legally charged to do (1986-2010).

This current situation is entirely predictable.

But I need to remind you of the CME Group’s COMEX 4GC shenanigans during March 2020. Back when they began allowing 400 oz gold bars sitting in unsecured London ETFs to be counted as part of the supposed gold backstopping the COMEX gold futures system as well. 

The COMEX 4GC has no volume at the moment, no one is trading it. It was an excuse to do what they did in other words. 

The CME Group COMEX most likely brought on the 400 oz bar can be counted the change in order to begin counting unsecured ETF gold piles in London, to give off the impression all is well with the gold price discovery system, and that it is flush with deliverable gold bullion. 

It’s not.

Especially not in any real physical size. 

Recall too that in July 2020, the COMEX began adding many questionable bullion bar brands from places China, Russia, and Turkey to be deemed ‘Good Delivery’ even though some of the aforementioned nations are often at the center of blood gold allegations ongoing.

The point I’m making here is that the physical gold good delivery world is likely a lot closer to physical delivery default in real size than most might think when just glancing at this chart. The truth may actually be closer to this in reality.

That’s all for this brief SD Bullion update.

As always take great care of yourselves and those you love.

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