“There’s a shortage of blanks.”
That’s the cryptic way the U.S. Mint puts it. “Once this inventory is depleted, no additional inventory will be produced,” the Mint added in a rather rude, no-nonsense tone. Boiled down, what the government agency is referring to is the baffling fact that it has given up trying to meet today’s record-setting consumer demand for its very own Eagle gold coins.
Huh?
This is, or at least should be, disturbing news. Especially at a time when we’re supposed to trust the government enough to put it totally in charge of the crucial health care and energy aspects of our personal lives, Washington is now appearing to completely botch a simple case of supply and demand. With wild consumer demand for its-wait for it-mega-successful products (Gold Eagles), the Mint is now blaming its three suppliers for not providing it with enough gold blanks…even while dragging its feet in not providing those suppliers with enough raw gold and silver metal to make the blanks in the first place.
In Orwellian terms, this is another unfortunate case of government “Doublethink.”
Lack of Competition in Our Money?
Why the government is appearing to sabotage one of its few successful commercial enterprises is suspicious, to say the least.
Maybe the Mint has become overly politicized, and now refuses to further embarrass the plummeting U.S. Dollar with its record-breaking gold sales. Certainly, gold is rare-that’s what makes it so valuable-but this is the U.S. government we’re talking about: It should have no problem whatsoever in getting the gold it needs for its coin blanks, even on some kind of pay-as-you-go basis.
Maybe Washington isn’t interested in stirring the controversy of “competing currencies.”
According to The New American, “…our nation once had competing currencies and this competition led to honesty in the field of money.”
“…the government did not have a monopoly in the field of coining money. As a result, the nation thrived, as one always will when there is sound money. But, today, the only legal money is fiat money issued by the Federal Reserve that is deemed money by law. Its value continues to decrease because there is virtually no limit on how much of it can be issued. If our country were on a gold or silver standard, inflating the supply of those precious metals would be impossible.”
Could this be why the now government feels it is a victim of its own success with its popular Eagles? Are Mint officials now wracking their brains, on taxpayer time, wondering how they can inject a firm measure of failure into its successful gold coin program?
The Ron Paul Remedy and Washington’s Bizarro World
Congressman and former presidential candidate Ron Paul has some big problems with the Federal Reserve and the way our monetary system is being conducted.
Specifically, his two bills, the Free Competition in Currency Act and the Audit the Fed: HR 1207 are aimed at heading off a showdown with a dollar that, due to the trillions being thrown around by Washington over the last few years, is quickly sinking in value. Congressman Paul’s sound idea of money is this…
“This medium of exchange should satisfy certain properties: it should be durable, that is to say, it does not wear out easily; it should be portable, that is, easily carried; it should be divisible into units usable for every-day transactions; it should be recognizable and uniform, so that one unit of money has the same properties as every other unit; it should be scarce, in the economic sense, so that the extant supply does not satisfy the wants of everyone demanding it; it should be stable, so that the value of its purchasing power does not fluctuate wildly; and it should be reproducible, so that enough units of money can be created to satisfy the needs of exchange.
“Over millennia of human history, gold and silver have been the two metals that have most often satisfied these conditions, survived the market process, and gained the trust of billions of people.”
Returning to that New American article again, “The Texas legislator also makes the realistic assertion that a return to competition in money would see an end to inflation, even an end to unconstitutional wars financed by the Fed’s paper bills. Deficit spending for numerous other unconstitutional programs would also be phased out.”
In a free market economy, the principle of supply and demand rules. Entrepreneurs first find out what’s in demand, then figure out how to supply it. With Washington and the Mint, however, the opposite appears to be true. Once demand starts raging in this case, government bureaucrats back off and take great pains to interrupt the supply.
As Seinfeld might have put it, that’s how business is conducted in the Bizarro World (of Superman comics).
Fortunately, the Mint’s Gold Eagles aren’t the only game in town. There are other popular and available gold coins such as Canadian Maple Leafs and Australian and UK sovereigns. There are also semi-numismatic and numismatic U.S. gold coins such as the St. Gaudens and Liberty $20. See a respected coin dealer, such as my Lear Capital, to understand the difference.
Kevin DeMeritt, President of Lear Capital, is a published author, analyst and expert guest on more than 1000 radio programs, including Rush Limbaugh and Coast to Coast with George Noory, discussing today’s economy, gold and the geopolitical picture. Now more than ever, his insights are welcome by nervous investors. Visit http://www.LearCapital.com for all the investing help you need.