Is The Perth Mint Panicking Over Their Silver Short Position?

by Bix Weir, Road to Roota:

I usually don’t respond to criticisms of my work that the Silver Cabal puts out but once in a while these criticisms lead to a larger truth that may just be the REASON for them to come out of their shell.

Case in point, the Perth Mint’s spokesperson Bron Suchecki recently posted an article criticizing my analysis of the Illegal Rationing of US Silver Eagles. You can find his post here:

US Mint has no “sufficient to meet public demand” requirement
http://www.24hgold.com/english/news-gold-silver-us-mint-has-no-sufficient-to-meet-public-demand-requirement.aspx?article=7773835148H11690&redirect=false&contributor=Bron+Suchecki

All I can say is “THANK GOD BRON IS AUSTRALIAN BECAUSE HIS ANALYSIS OF US LAW IS WOEFULLY LACKING IN BOTH UNDERSTANDING AND INTERPRETATION!”

As a matter of fact – the ONLY thing he got right in this article is that I misstated that Edmond Moy was the current Director of the Mint…I chalk this one up to having written so many letters to the US Mint that I copied and pasted the addresses from prior postings. Whoopsie-Daisies!

As for the rest of Bron’s analysis…RUBBISH! Pure RUBBISH such that I was not even going to respond but something struck me that may have some significance in our battle to uncover the TRUTH behind silver market manipulation…Why Now? Why did it take Bron over a month to post this article since the time I posted mine? Given the past “PROBLEMS” at the Perth Mint that I had addressed years ago I had to ask myself IS THERE ANOTHER FIRE BLAZING BEHIND SCENES AT THE PERTH MINT?

Here was my last run around with Bron and the PERTH MINT way back in 2011…

The Road to The Perth Mint
http://www.roadtoroota.com/public/495.cfm

Hi Bron

Thanks for the email and your remarks. I do have a few questions as our viewpoints don’t exactly match.

Contrary to what you wrote, the Perth Mint DOES provide metal leasing as well as other paper metal services through your Treasury Department. Here’s the link to your own website: http://www.perthmint.com.au/about-treasury.aspx

“Our services include:”

* Sales and Purchases of Precious Metals * Location Swaps * Leasing, Consignment Stock and Funding Facilities * Price Hedging

It can’t be much clearer than that.

In the 2008 Gold Corp Annual Report your metal leasing programs were clearly represented. They seemed to have disappeared from your reporting in the 2009 Report. If you have terminated these programs please explain how it was done and why.

END

Yes, the Perth Mint has changed a bit since I called them out on their “Unallocated Metal Storage Program” but they are still a very big player in the metal derivative market.

Back to 2015…

Here’s the main points made by Bron as to WHY it is not illegal for the Mint to curb production…

BRON: “It appears that these subsections were amended by the Coin Modernization, Oversight, and Continuity Act of 2010 in December 2010 replacing the non-discretionary word “quantities” with “qualities and quantities that the Secretary of the Treasury determines are”, which in my opinion gives the Secretary discretion on how many coins to make to meet demand. As it is difficult to forecast demand for a product driven by volatile precious metal prices this would mean that shortages would occur when demand spikes.”

My analysis: As I said in my article, although it is the US Treasury Secretary that makes the call, the LAW is clear of what his duties are and that is to provide US Silver Eagles that “are sufficient to meet public demand.” Did you notice how in Bron’s article he quotes the law but leaves OUT the part about “sufficient to meet public demand”?

“(e)Notwithstanding any other provision of law, the Secretary shall mint and issue, in qualities and quantities that the Secretary determines are sufficient to meet public demand

No Bron, your interpretation of the US Law does not hold water but may give you comfort that the US Mint will not go out and buy all the silver planchets leaving the Perth Mint with ZERO. Also, what would a fast rising silver price do to your Silver Hedging Positions?? Surely, you covered your short hedges when your silver inventories were depleted in the latest shortage…right?

BRON: “Additionally, the concept of “demand” only makes sense in respect of a time period. The fact that there is no time period mentioned in the law would mean that those proposing that the US Mint must never stop sales or ration are saying that the US Mint has to supply as and when demanded, that is, on a day to day basis. This leads to the absurd position that the US Mint would have to hold tens of millions of coins in stock, as it is possible that on any day there could be such an amount of orders placed.”

My analysis: Yes and no. Yes, the US Mint is required to and CAN accept all demand orders at any given time. It is the law. No, the US Mint does not have to have the coins sitting in inventory waiting to be sold. Here’s the guts of the problem that Bron seems to not comprehend…Order fulfillment does not have to happen immediately – it rarely does in any business. BUT the orders can be taken and SET at the price the Mint can obtain the silver at that time. That’s how a free market works. What is happening is that the US Mint is NOT bidding the market higher to obtain the required blanks to fill orders…they STOP taking orders or RATION orders. This is against the law.

BRON: “I would argue that the fact that the law makes no reference to a time period would mean that any court asked to rule on this wording would apply the standard that would apply to a privately run business. Privately run business do not spend massive amounts of money on building production capacity to meet temporary spikes that would otherwise sit idle, as that is uneconomic and would lead to the eventual bankruptcy of the business (see here for an explanation of these issues). Therefore I think it is likely that a court would come up with the more commercially sensible interpretation that the US Mint is required to make coins to meet the Secretary’s (and thus their) reasonable forecasts of demand.”

My analysis: HA! No wonder the Perth Mint can’t fill orders…they have no idea how to run a business!! NEVER turn away customers with cash ready to pay for product. MAKE IT HAPPEN! If you need to bid up the price of silver to obtain the necessary amount of metal – THEN DO IT AND CHARGE THE CUSTOMER FOR IT! The problem that Bron is dancing around is the massive mis-pricing of silver due to market manipulation. That’s why there are shortages of metal at these low silver prices.

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