by Jason Hommel, September 6, 2008
If the Perth Mint has $880 million worth of silver and gold in inventory from their certificate program, to use as working inventory to make coins, then why aren't they producing many Australian coins that should be flooding the marketplace and available everywhere at close to spot prices?
Let me explain why I hammer Perth so mercilessly. The Perth Mint has issued silver certificates. Investors trust them. Perth has issued those silver certificates for a reason, a reason that silver investors should love.
As they are a mint, they need an "operating pool" of physical metal to use as inventory for operations, to be able to make silver coins to sell to the public in the form of one ounce rounds. This is a fantastic reason, and I would support that 100%, especially if they buy more silver as needed, buying one ounce for every ounce sold. In theory, that would mean that there could never be a silver shortage at the Perth Mint. There is especially no reason for a silver shortage to exist at Perth, given that Australia exports over 400 tonnes of silver each year! The Perth Mint could never run out of silver to sell if that program was run honestly, in stark contrast to the U.S. mint, which is suffering a shortage of blanks.
In fact, the current world-wide shortage of investment silver, such as one ounce coins, means that the world desperately needs a functional mint with plenty of silver for operations.
But Perth does not produce one ounce rounds for the public in bulk form at just above spot prices, as other mints do. Why not? Why can't they?
For example, the Canadian Mint produces silver Maples 3-5 million per year, and the U.S. Mint produces silver Eagles, about 10-20 million per year, and Austria is now producing silver Philharmonics, and France, I hear, may also start producing silver again, too.
And all of these are available at between $2-3 per ounce over the spot price, and sometimes now at over $4/oz., due to the shortages of silver.
In stark contrast, Perth produces much less, and they sell their 1 ounce coins at an average price of $61 per ounce!
That's $48 over the spot price for Perth 1 oz. rounds! Isn't that a 369% premium over the spot price?!
What's the problem here? Shouldn't they be able to produce silver coins like the U.S., Canada, and Austria? Perhaps Perth doesn't have enough silver in their "working inventory" to produce more?
But they have issued $880 million worth of gold and silver certificates to the public, and therefore, should have plenty of working inventory. In fact, it is so much working inventory, that it amounts to an entire year's worth of investment demand for silver.
Net investment demand for silver is estimated at 60 million oz. by the CPM group, which, at $13/oz. is only $780 million!
Perth has is so much working inventory, that even if the Perth Mint had to wait for a 1 year hold time for delivery to replace their inventory, they would still be able to supply nearly 100% of the silver that the investment world needs, and they could supply it with no delays to the public whatsoever!
It is so much working inventory, that if the Perth Mint had to wait 1 month for supplies of all new silver, they could provide 12 times the world's annual silver demand, and all silver investors everywhere would be buying nothing but Perth Mint Australian one ounce coins, and no other forms of silver whatsoever.
If only 1/10th of the $880 million of gold and silver certificates is in silver (and they don't reveal what percentage it is), then that would be $88 million. Divide by $13 = 6.8 million ounces of silver. If that much were minted monthly, that would come out to 81 million one ounce rounds, which would be 4 times as many coins minted by the U.S. Mint.
Therefore, one would think that if the Perth Mint was honorable, that the Perth Mint should be producing far more silver ounces than the U.S. Mint each year, at a lower cost, and that we would see those in abundance in the marketplace.
But Perth does not issue coins like that. You cannot buy Australian bullion coins in bulk at APMEX, Tulving or any other major wholesaler. Why is that? I think the answer is obvious.
Where is the abundance of Perth Mint rounds? There is no abundance. They are scarce.
It appears to me that Perth's silver in their certificate program, "used for operations" was used to cover unprofitable operations, for years, and that in actual fact, they have no working inventory, or they have less than 1% of the $880 million worth of inventory, barely enough to meet some redemptions and orders on occasion.
Over 50 people have continually complained to me of shortages of silver from the Perth Mint, in my prior emails exposing them. Why are these people complaining to me? Do I have the words "Perth Mint Customer Service Rep" tattooed on my forehead, or in my disclaimer? No.
Sell or redeem your Perth Mint certificates, quickly
Nadler, Kitco, Perth, Matthey; Sold Out! September 3, 2008
Perth Mint Crisis Watch 5 June 6, 2008
Perth Mint Crisis Watch May 23, 2008
Perth Mint Crisis: Solutions and Ramifications May 23, 2008
To the largest newspapers in Australia May 22, 2008
To the government of Western Australia May 21, 2008
Poor Prospects for Kitco/Perth/Matthey May 19, 2008
Will Kitco Sue me?! May 16, 2008
Silver Shortage Drives Men Nuts March 31, 2008
Perth Mint and Kitco Scheme Exposed March 26, 2008
See what others are saying about the Nadler/Kitco/Perth/Matthey issues, here:
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