US Mint Mark-Up On Silver

For starters, your math is wrong.

The US Mint is unable to acquire planchets at spot. Additionally, the current spot price of silver, as others have pointed out, has little bearing on the acquisition price of silver for the Mint.

You're missing the fact that the Mint needs to buy it's silver in sheets, punch rounds, anneal and upset rims on planchets, recycle excess silver into new sheets, develop dies, run the press, etc.

That's simply the manufacturing cost. Let's figure on that as 60-cents per ASE.

Next we need to include acquisition costs. Let's assume it costs the Mint another 50-cents per ounce to acquire its bullion.

Transportation and storage costs: Let's be simple and make it an even dollar, to account for the multiple Mint locations, vault storage, insurance, etc.

So, that's a $2.10 premium before the coins are packaged and advertised for sale.

Now, as to be expected, in years when silver prices are low relative to the cost of ASEs, actual coins sold will be lower than total production. These coins need to be recycled at a huge loss. In order to not "book" this loss (since the Mint is not allowed to operate as a non-profitable entity), a loss premium must be built into the price. Let's call this y = (a-x)/k, where y is the percent premium over spot, a is the silver acquisition cost, x is the spot price of silver, and k is the premium constant. As the price of silver increases, the percent premium over spot decreases.

Marketing/advertising/education adds, say, another $5 per ASE onto the price.

Shipping is $5 per coin.

$12.10 per coin plus the loss premium.

When spot price is increasing, the loss premium might be occasionally negative. When spot price is falling, the loss premium will grow.

Your scenario of advertising, marketing and shipping being the sole bearer of costs is fallacious, at best, and possibly nefarious in intent.

 

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Nefarious? Me? I'd have to be a lot smarter to be nefarious. Fallacious? No doubt. Ignorant in these matters yet willing to spew nonsense? Bingo.