US Mint sold out of 2013 silver eagles - 6,000,000+ sold!

Absolutely. Overall for ASEs, BAD OMEN.

Janaury is by far the best month for US Mint sales: they sold 7.6 million ASE units/ozt in January& February 2012. And they're struggling now!

It's known the US Mint is scaling back production of Silver coins ; PCGS is scaling back it's coin-grading service likewise (as CLCT said in their Fall 2012 earnings call.) That's trend. Sales were down big-time last year; the US Mint going to have to cut-costs if they cannot sustain this coin-hype and reverse trend.

So what US Mint coin types are triaged for discontinuance? Will they just stop minting ASEs in March/April?

Based on these three assumptions
a) that aggregate sales # is predominantly a 30- 45-day pre-order (say, January & February) from retailers and
b) US Mint sales follows the 2012 monthly buying pattern and
c) POS remains relatively high (~$30.) with no US economic improvement AND some increased taxes hitting US households, then

I really can't see ASE sales topping 27 million ozt./units in 2013. In other words, that's a -21% decline for 2013 sales.

 

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If the mint was able to keep up with demand they'd probably sell 50 million this year, but they can't. So who knows you might be right, but I'd still say there is a 90% chance they sell 30 million+ this year

 

Really?! You think they wouldn't coin 15~20 million more, if poss? (I mean: IF THAT DEMAND WERE THERE. It's not.)

Did you read the 3q2012 CLCT conf call transcript? It's pretty grim, "for the foreseeable future." Remember, this is someone's business model and not flaky coin-collector druthers.
CLCT execs also blamed "stagnant PM prices" (which I read as 'too high for most US coin buyers') but I've posted elsewhere how US retail bullion consumption has been declining, by the numbers, for awhile. TREND IS INTACT.

We definitely won't see +30 mln in ASE units coming outta the US Mint in 2013 unless c) reverses:
c) POS falls ~-25% and the economy improves dramatically along w/ US Households finances

Hope springs eternal, 'It's Morning in America' etc., etc. ... but I don't see that in the cards now, do you? In what quarter will we see that turnaround and why, specifically?

 

The chart below was as of 1/8 which I got from here:
http://www.zerohedge.com/news/2013-01-08/us-mint-sells-massive-39-million-ounces-silver-coins

You can see that even 10 days ago demand blew away initial sales in 2012. It is likely due to pre-order but it's not like there weren't pre-orders in previous years either.

 

InfleXion-
In January 2012, the US Mint sold 6,107,000 units. If they've sold 6,007,000 ("Sold Out") that's LOWER. They need to sell 7.6 mln in January & February just to keep pace with YoY with the last sluggish winter. That's why they're desperately hyping this. TREND IS DOWN.

Mint needs to get O to say he's outlawing ASEs lol

 

Considering that the amount of silver on the open market is roughly 1/3 of a year's worth of mining supply (300 MOz on the COMEX if they are telling the truth), and that mining supply is roughly 200 MOz short of overall demand each year thus requiring bringing existing metal to market to meet the shortfall, and that mines formerly categorized as primary silver mines are now categorized as primary lead or primary zinc mines since those 3 metals exist homogenously in the ground, but the 'primary' designation is based solely on profitability as opposed to quantity and thus silver is historically less profitable than it has ever been as compared to these other 2 metals - how exactly is the POS relatively high? I'd say it's relatively low compared to $49/oz, and is the same price you could have bought at 2 years ago unlike gold which has a greater price premium since then. I am aware of the cost of production argument, however since these mines are not primary silver mines the cost of production is projected onto the primary metals. Silver is just a byproduct at this point, and for these mines to become primary silver mines again the cost of production for silver would rise accordingly to meet the cost of operating the mine as opposed to being along for the ride.

 

I'm not really paying mind to the US Mint in particular. I don't buy from them, and I prefer 9999 Canadian silver anyway. I'm just looking at it from a demand standpoint which is independent of how many the US Mint decides to make. Less than 2 weeks into 2013 they sold as many as they did in all of January 2012. If people aren't willing to pay the premiums then these are going to sit in dealer inventory. Nobody who is an avid silver collector is going to overpay for an SAE which is a government minted round. Personally I have never bought from the US Mint and I've never paid more than $4 over spot for one. These premiums are outrageous and I doubt they will sell unless Joe Sixpack makes an appearance.

Something else to consider. Maybe they can't make enough because they don't have enough silver. We haven't identified the reasons why, only speculated, but it is a fact that yearly SAE demand exceeds silver pulled out of the ground in the US. SAE demand alone requires buying foreign silver.

 

Based on 60 months' avg POS, HIGH.
Based on what collectors paid 'in recent years,' HIGH.
Based on the consumer's wallet, HIGH.

(Anecdotally I hear and) suppose there are ALOT of bullionists on the sidelines since $25./ozt - but I don't know this for a fact. I also don't know who buys these coins (geriatrics sitting on silver piles, not buying any more? Boomer preppers facing a cable-cut off?) but I do believe CLCT knows their clientele. If they're that pessimistic, discount the Mint's SOLD OUT hype.

I also have no idea what (if any) effects the Fiscal Cliff/Debt Ceiling debacle might have on the US Mint. It's wishful thinking to say NONE. Just because it's profitable don't make it a sure thing...

 

When adjusted for actual inflation? Not necessarily. This also assumes that the price wasn't undervalued before. Price comparison means very little when there are not free markets.

And where are your numbers for peering into my wallet?

I have to admit Juan, for someone who is often pointing to the folly of the paper bugs you are starting to sound more and more like one.

 

Ouch! I call it 'playing Devil's advocate' ... and I'm no "Gold Bug" either. I try to see trend, that's all.

As for my take on the consumer's wallet, well, I read US retail forecasts too. Presume that 'coin buyers' (while a niche) are not a different species altogether. At this price level, many bullionists are not snapping up ASE like they once did - so the ASE market peaked in 2011. If Norfeds are an example of exhausted fad (cratering premiums are the PROOF) then ASEs might likewise have lost whatever marginal retail interest drove sales #s so high in 2009-2011. Now, ASE sales will subside.

Only time will tell, but I trust the expert opinion of the CLCT execs.

 

Juan, I'm a bit confused, it seems you are not understanding the story? The mint can't keep up with demand, that is what the entire story is......So correct, they are not minting as much as they could. Perhaps even 15-20 million less.

All the mints distributors are either SOLD OUT or raising their prices because the mint isn't giving them enough product so they figure they might as well raise the prices so they don't become sold out as quickly.

 

Sorry, not really following. In accounting if you have a blended output, the best way to assign common costs is by market value. However, if you are saying that lead and tin are worth more than silver, and if silver stays the same, mathematically the profit margin per ounce of silver for that mine went up, because allocated COGS will have to go down. Specific example, (making up numbers), if before for 1 ton of ore you yielded $1 in lead, $1 in tin and $1 in silver, and it cost you $2 to process that ton, you will show $.33 for each product as a profit margin. If costs stay the same, as does silver pricing, but lead and tin prices double, you will only assign $.40 as COGS for the silver as opposed to $.67, because you would weight your COGS more heavily to the lead and tin.

So, it doesn't matter what they CALL such a mine, the silver is still coming out. Your costing argument is actually going the other way, the higher lead or tin goes, the MORE profitable silver becomes, and it allows the mine to remain profitable even if silver crashed to $10 an ounce.

I have said this before, the higher copper or lead/tin goes, the more bearish it is possibly for silver, since there will be less "costs" in these ounces of silver, and higher production.

 

It sounds like a bunch of hype by the bullion dealers.

Average the sales out over an appropriate (longer) time period and it doesn't look like demand has spiked.

Why do people need the 2013 dated eagles right now anyways? Come Jan 2014 these same people won't touch them.

 

Tinpot-
I'm honestly not sure where to begin or how to explain this to you.
The US Mint knows how many units they can sell.
The Mint doesn't vastly overproduce ASEs because that would be ruinous.
The Mint KNOWS it cannot sell 33 mln (let alone 50 mln: sheesh!) and the momentary "supply shortage" is a harbinger of 2013: much lower sales #s.

Frankly, the Mint's story sounds more like the hype that drove Beanie Babies into la-la land. I'm curious why they're playing that game now. Hmmmm.... ?!

Yep. Check how Ty's Royal Blue Peanut Beanie Baby WAS $4,400. (June 2000), now it's $580. (January 2013) ... very few bids/buyers, too.
http://www.ebay.com/itm/Authenticated-Rare-Ty-Beanie-Baby-Royal-Blue-Peanut-/110964420211

 

Ok I understand your argument now. That said, you are dead wrong.

Tulving is almost undoubtedly the biggest seller of silver eagles, they are SOLD OUT. THE MINT IS NOT MEETING THE DEMAND.

If your point is the mint didn't expect this type of demand then I suppose that is a reasonable one, but saying the demand isn't there is ridiculous considering the state of distributors. Either sold out or raising their prices because the mint is not giving them enough supply.

 

The US Mint is supposed to mint more at the end of the month, or in February. This isn't anything new, I think they have sold out every year since 2008 but it may have started sooner. I think it's all part of their marketing strategy.

 

Well I am not a rocket scientist, but by comparing to the 2012 numbers it seems like they are selling quite a bit more silver and gold. A little over halfway through the month and they are almost past last years sales numbers (gold about 5500oz away and silver about 100,000oz) and from what I can tell well on their way to new all time highs. Also looking like shortages are a part of the problem, probably not the only problem, but part of it.

Only time will tell... Suprised we didn't see a paper raid today... was hoping to buy more on the dip

 

Which telemarketers are authorized distributors of the bullion Eagles?

 

I was referring to the telemarketers ordering more from an authorized dealer than the mint expected. The HSN/telemarketing crowd has to be a major demand driver for these in the first part of every new year. I think I flipped to HSN 2 or 3 times to their "coin show" this month and their major push are the "early release" 2013 products, especially ASE's.

 

Tinpot-
Do you really think - however many centuries producing Proofs - the US Mint doesn't know how many 'collectible coins' it can sell? (Say: to the nearest 100,000 units)

Do you really think it's within the realm of possible the Mint is underproducing ASEs by ~15-20 million units per year... and that:
a) the US Mint is staffed by complete morons, no idea what US Silver coin-demand is, just walkin' away from million$ in Free Money!!! every year?
b) the market (dealers, eBay, everyone!) doesn't appreciate HOW IN DEMAND & RARE existing product is - like, premiums should be multiples higher for "scarcity" (unfilled demand) of 2012 ASEs?

Sorry. That's just not right. Not at all. The Mint certainly knows this business - better than any one dealer to be sure. (Please don't cite convicted fraudster Haanes Tulving as a reputable source. He's no more reputable than Bernie Madoff!!! http://articles.latimes.com/1991-01-16/business/fi-266_1_coin-dealers ) And CLCT is frank & honest in their shareholder comments; TREND IS TREND.