Blame the U.S. Mint for Lack of Silver, Don't Blame Customers
By Alec Nevalainen, Coinflation.com
Updated: January 8, 2011
I can't resist commenting on an article published on Numismaster.com today titled, America the Beautiful Bullions Go to "Profiteers". It gives a slightly different perspective about the frenzied line of buyers waiting outside a coin shop in Springfield, IL, which was first covered by the State Journal-Register on January 4th (please read both articles if you're unfamiliar with the story).
I think everyone is aware that major coin publications tend to skew their views towards the dealer (or advertiser) perspective, rather than the point-of-view of the consumer. Perhaps any remaining doubts to this claim were laid to rest in David Ganz's recent column Infomercial Takes Time, Practice. He states it's a privilege to do an infomercial for the Danbury Mint and he'll "leave it to other readers to debate" if their prices are fair.
But let's make something clear about the new 5 ounce silver coin from the U.S. Mint. They didn't produce enough to meet demand and it was likely intentional. The drama has created more interest in their products and particularly in the clad version of the "America The Beautiful" quarter series. Maybe I'm giving the Mint too much credit, but I don't think so.
The point I'm making here is that the customer is not to blame for high prices, and deriding them as "profiteers" is dishonest. Blame the U.S. Mint's lack of supply, don't blame the consumer. I'd love to own a set too, but I'm also not upset that other individuals were more aggressive getting into line or making phone calls. I'm happy for them.
The bizarre aspect from the entire episode is why a coin dealer would be so angry about the Mint's pricing rules and the strong aftermarket. You would think a line of people waiting outside his business, generating national media attention, and wanting a product where he's making 10% plus expenses would be an opportunity of a lifetime. Apparently not.
But since we're on the topic of "profiteering", it is really interesting that the Springfield, Illinois based Treasure Hunter's Roadshow has more than a few sets of these coins, and offering them to their "network of buyers" on eBay (a few of their seller ids are coinsantiques.14, coinsantiques.11, coinsantiques.13, coinsantiques.15, coinsantiques.21, coinsantiques.22, coinsantiques.25 and many, many more). I'm guessing their feet must be plenty sore from waiting in that line of 500 people earlier this week.
To sum up, savvy business owners usually don't insult their customers and complain about their exclusive status as a Mint-authorized distributor. They use opportunities like this to promote their business.
The collective outrage over the initial price gouging from some of the Mint-authorized purchasers was justified. Most would think it's a privilege to be one of the few distributors for the U.S. Mint considering the overwhelming demand for silver right now, and that privilege should not be abused.
The lack of supply of silver bullion coins and the timing of the release from the U.S. Mint is the real outrage here. Protecting consumers against distributor price-gouging is not. Unfortunately for everyone involved, the U.S. Mint silver-coin supply chain continues to disappoint.