Ron Paul Links Bullion Coin Shortage To Horrendous Currency Debasement

April 8, 2011

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.

Comments

By sdollarfan on April 8th, 2011 at 2:42 pm

RE: That last line in your article about no Mint reps being available to
explain why the Mint cannot keep up with demand.

The reason is simple: The Mint’s silver suppliers in the private sector (i.e. the silver mining and refining companies) are not able to produce enough refined silver to keep up with the global demand for the metal. The Mint isn’t the only entity in the world demanding more silver from their producers than the producers can provide. This is why the price of the metal is skyrocketing — demand exceeding supply on a global basis.

By foggy on April 11th, 2011 at 8:53 am

Wow! I thought the united state had the largest silver and gold reserves in the world… I didn’t think they would need to be out shopping for gold and silver on the open market.

By zacfoo on April 11th, 2011 at 11:55 am

Supplies are down everywhere you look: Many mints have a 6-8 week backlog on 1 ounce silver bullion. Demand is skyrocketing, too. Therefore, retail premiums are going up. With all this said, NOW is STILL a wonderful time to buy more PM.

By Santi on April 11th, 2011 at 10:54 pm

“By law, the US Mint is required to produce coins “in quantities and qualities that the Secretary determines are sufficient to meet public demand”.”

Hahaha…the government doesn’t care what the law says anymore. They are above the law, unaccountable and out of control.

By idknow on April 13th, 2011 at 4:24 am

not “above the law”, outside of it, as in Illegal.

and remember, “the Govt” is the corporate name, the business conducted by people.

By LJ. on April 20th, 2011 at 11:49 am

“I thought the united state had the largest silver and gold reserves in the world”

They used to have the largest silver reserves, but they sold it off for no good reason.

By 1776 on May 1st, 2011 at 1:50 am

The surprise – we are broke folks! There isn’t even enough gold to even come close to paying 10% of our debt. We have elected people who swore to uphold the constitution. They then promptly broke their oath to avoid loosing their seat rather than tell the truth to the people. “We have been mismanaging the country at your demand to assure we get to keep our job,” we have all committed fraud.

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