From Coin World: "Buyers of U.S. Mint's American Eagle silver bullion coins are sitting on stockpiles Whenever demand increases again, the authorized purchasers will be able to immediately ship product to their customers. " Sorry, I don't have much sympathy for the "authorized purchasers". Although the true culprit is the US Mint. The Mint just will NOT sell to individuals. It's easier for them to sell large lots to a few rather a few coins at a time to the REAL intended target -- the collector. But I'm a bit surprised the "authorized purchasers" don't see that there's a limit to the market and therefore not get overstocked. What if demand doesn't increase again?
They were betting on more buying demand with the uptick and it seems to be going the other direction is my guess. Lcs's around here are getting more silver being brought into be sold than people coming in to buy. Kinda strange. We all know the truth though... Buy now and as much as possible
I disagree that collectors ever were the intended audience for ASE's. Quite the opposite, if you read the literature of the time (1986). They were intended for commodity speculators. It's only long since 1986 that we, incorrectly, decided they were the same thing. By the way, re the overstock? Couldn't happen to a nicer group of guys.
(By the way, re the overstock? Couldn't happen to a nicer group of guys. ) Back a few months ago when ASE's got in short supply(At least around here) and silver was about $17.00 / ozt the LCS was wanting $22.00ea. and was getting it. He was sold out.
This "ENTIRE" Authorized Purchaser program was implemented well before the existence of the Internet and automated shipping software. Had that capability existed, we'd be able to order the Eagles "Online" since I do not believe that the US Mint felt that it would be profitable for them to set up an individual purchase program which would have required staffing to answer all the snail mail!
I agree. First, I don't think the mint thought that BU examples would become "collectible". They thought the proofs would, which is why they do sell proofs to individuals. Second, you have to remember its much more expensive to sell to individuals than wholesalers. Wholesalers take large quantities, credit is already assured, very minimal customer service, etc. For the mint to offer ASE to individuals they would need to jack up prices considerably. Then collectors would all whine how wholesale dealers "were getting a better deal" than collectors. There is a reason why Costco buys goods cheaper than you can directly from a manufacturer. Same is true for the mint. I agree its probably best for them to only sell to wholesalers lest a bunch of angry collectors write their congressmen complaining about "price disparity". Its just the same with my industry. Want to buy 5 pounds of cheese? Then I am going to charge you $2 over the market per pound. Want to buy 10 million pounds a year? Then you are looking at maybe 6 cents over the market.
Ding! Ding! Ding! A "rite of passage" at the Winter F.U.N. show is watching pallets (aka skids) of new year ASE's be pulled across the bourse floor to the third party graders' tables. A more thorough waste of time and money is difficult to imagine. But then again, we're coin people, we're nuts.
Eagles were selling faster than they could be made. Dealers were putting in orders as fast as they could when the price of Silver started to jump. Silver climbed too quickly to reduce or cancel orders. Dealers were stuck with what they ordered. It doesn't matter though. This overstock was likely all purchased with spot below $18/oz. The inventory is worth more now than it was when it was purchased so who cares if it sells less quickly. Just don't order more until you can move the inventory. If spot stay up and sales continue to stagnate, looks for shelf clearing sales to generate cash flow. Dealers will still be selling for more than what they paid and buyers get the opportunity to buy lower premium Eagles.
$15 silver? It has the potential to get there a lot quicker than people think. Not saying it doesn't still have upside. But these types of commodity cycles always have the potential to end violently with too many people hanging on too long hoping for a reversal. Everyday stackers don't drive these markets; huge investors do. And the big boys can jerk the rug out at a moment's notice when they see a better opportunity -- or need to cash profits to cover losses elsewhere.
