I spoke with Mike today. This is heresay....
According to Mike ( See bottom of this report) silver supply should be very tight at the end of 2001.
Latest From Silver Institute
National Defense Silver Stockpile Nearly Depleted
February 24, 2000
(Washington, D.C. - February 24, 2000) The U.S. Mint consumed nearly 10.3 million ounces of
silver in 1999 for its coinage programs, dramatically reducing stocks of silver from the U.S. National
Defense Stockpile. Once exhausted, the U.S. Mint must purchase silver for its coinage programs
from the open market, boosting silver demand by up to 1 percent annually. This increased demand
would further widen the gap between overall silver supply and fabrication demand. Between 1990
and 1999, cumulative silver fabrication demand far exceeded mine production, which resulted in
reducing above-ground silver bullion inventories by an estimated 1.25 billion ounces during that
period.
In 1999, the Mint issued nearly 9.5 million ounces of American Eagle Silver bullion coins and proofs
and consumed roughly 460,000 ounces in the manufacture of commemorative coins. Approximately
360,000 ounces of silver were used in the production of 1999 Commemorative Silver Proof Coin
Sets. Some silver is also used in gold coinage alloys, as in the production of American Eagle Gold
Bullion coins, proofs, and gold coin commemoratives.
As of December 1999, the Defense Department's silver stockpile totaled 21.2 million ounces, down
85 percent from its opening balance of 139.5 million ounces. The silver stockpile once posed a
serious threat to the market when government officials determined it was no longer needed and that
domestic silver production combined with reliable imports could sustain the United States in the
event of an emergency.
In the early 1980s, the General Accounting Office (GAO), an investigative arm of Congress,
recommended that silver from the stockpile be used for coinage rather than sold on the open market.
GAO's proposal assured that using silver to mint a bullion coin and other forms of coinage would
minimize or eliminate any short-term market price disruption by developing new demand to offset the
increased supply. GAO's proposal was implemented when Congress created the American Silver
Eagle bullion coin in 1986 and specified that metal for the coin be drawn from the stockpile, unlike
the Gold Eagle for which the U.S. Mint is required to use newly mined gold from domestic mines.
Annual Silver Eagle sales have significantly accelerated the reduction of silver from the stockpile,
using nearly 91 million ounces since it was created 14 years ago.
As bullion coins, Eagles are considered legal tender by the United States government and
their silver content is guaranteed. The $1 face value of an Eagle is largely symbolic since its market
value depends totally on the silver content. In addition to the Eagle, the U.S. Mint has struck silver
coins commemorating events and people ranging from Christopher Columbus, Dolley Madison, the
Olympics, and the Yellowstone National Park Silver Dollar.
The United States was the largest single user of silver for coinage in 1999. Having consumed almost
120 million ounces of silver over the past 19 years, the U.S. Mint is one of the largest silver users in
the world accounting for more than 1 percent of worldwide demand during that period.
For Further Information Contact:
Mike DiRienzo
The Silver Institute
1112 16th Street, N.W., Suite 240
Washington, D.C. 20036
Tel: (202) 835-0185
Fax: (202) 835-0155 |
