Ron Paul Links Bullion Coin Shortage To Horrendous Currency Debasement
Rep. Ron Paul, during a Subcommittee hearing on problems at the US Mint, linked the shortage of gold and silver coins to the "huge debasement" of the United States currency.
The remarks came during a hearing by the House Financial Services Subcommittee on Domestic Monetary Policy, entitled "Bullion Coin Programs of the United States Mint: Can They Be Improved?" Four different coin and previous metals industry experts provided testimony on how to address ongoing problems with coin production and shortages.
After some lengthy discussion by witnesses and committee members regarding shortages of silver coin blanks and marketing and production problems at the US Mint, Rep. Paul focused on what he considered to be the primary reason why the US Mint was, at times, unable to meet public demand for gold and silver coins.
Listed below are highlights of Rep. Paul's remarks at the Subcommittee hearing.
- It is "imperative" that the US Mint should be able to produce an adequate supply of coins to the U.S. public. According to Rep. Paul, investors are rushing to purchase gold and silver due to quantitative easing by the Federal Reserve.
- The US Mint should take the appropriate steps to source enough planchets to meet public demand for gold and silver coins. People are worried, stated Rep. Paul, and are trying to preserve their wealth through the purchase of gold and silver due to government policies that will lead to inflation and debasement of the currency. Rep. Paul stated that "If we had a sound currency" there would not be a shortage of gold and silver coins since demand by the public would be a non event.
- Rep. Paul detailed the "horrendous huge debasement" that has occurred with the US currency. In the early 1930's, when gold was on a fixed exchange rate with the US dollar, the dollar was worth 1/20 ounce of gold. It was subsequently devalued to 1/35 ounce of gold during the 1940's, to 1/38 ounce of gold in the early 1970's and to 1/42 in 1973. Once it became legal for US citizens to own gold and the dollar was based on market prices, the value of one dollar subsequently dropped to 1/1450 ounce of gold.
- Rep. Paul noted that total annual demand during 2011 for Silver Eagle bullion coins should reach 48 million ounces, but that total US silver production would amount to only 40 million ounces. The US Mint should take all necessary steps to ensure that adequate supplies of silver are available to meet public demand for silver coins.
Although not specifically addressed, the issue of whether the US government is making an effort to limit the sale of gold and silver coin to the public remains an open question. By law, the US Mint is required to produce coins "in quantities and qualities that the Secretary determines are sufficient to meet public demand". There were no US Mint representatives present at the Subcommittee hearing to explain why the US Mint is unable to comply with production mandates specified by law.