Four witnesses testifying before House Committee on Financial Services Subcommittee on Domestic Monetary Policy and Technology agreed that the US MINT loses at least one third of their bullion coin sales because they cannot meet demand.. “The Mint has taken steps to address its supply difficulties by adding additional capacity, but it still struggles to meet demand, particularly for the silver eagle bullion coins,” Terence Hanlon, president of Gage Metals, a Dallas-based precious metals dealer, told the lawmakers.

Ross Hansen, found and CEO of the Northwest Territorial Mint said he was able to acquire the Medallic Art Company, a former primary producer of silver blanks for the Mint, because government officials decided to take their business somewhere else. Currently, the primary supplier of silver bullion blanks is the Coeur d’Alene Mint in Idaho with the First Mint of Australia as back-up.

The fact U.S. precious metal coin blanks were being purchased from Australia incensed several members of the subcommittee. Hansen suggested, “It should be made in the United States, not overseas. We’re providing American jobs.”

“We could supply all the blanks the U.S. Mint would ever need,” he declared.

Beth Deisher, editor of Coin World, told the subcommittee, “The quality of silver, gold and platinum bullion coins produced by the U.S. Mint is exceptional. However, the marketing of these coins is sub-par and is often disruptive to the marketplace.”

“Most of the Mint’s problems in marketing bullion coins are rooted in an ongoing failure to understand who its customers are and why they purchase bullion coins,” she observed.

“Marketing multi-year bullion coin programs appears to be an arena in which the Mint continues on a self-destruct path,” Deisher said, “in which mistakes made in the first year of offering dramatically reduce sales potential for the remainder of the program.”

“The most current example is the Mint’s decision to produce only 33,000 of each design of the 5-ounce .999 fine silver versions of the 2010 America the Beautiful quarter dollars,” she noted, adding the program is supposed to be an 11-year investment program honoring five national parks and historical sites annually.

Although the program was approved in December 2008 production did not actually begin until Sept. 21, 2010. “Despite the Mint’s earlier announcements suggesting 100,000 of each of the five designs would be available to the market, five days before sales to the public were to begin, the Mint disclosed it would instead produce only 33,000 for each of the five bullion designs beating the 2010 date for distribution through its established network of authorized purchasers,” Deisher said.

“But again, we have low mintages that smack of contrived rarity, without thought or concern about the long-term consequences of these extremely low mintages,” she asserted,.

Deisher also told the representatives that “every time there is a new collector product offered and you go to the [U.S. Mint] website, people sit there for hours trying to get in and you can’t.” The situation is so bad “people will pay people who will sit for hours and hours trying to get into the site.”

“Some people are able to sit by their computer during business work hours and purchase in quantities, thereby shutting out others,” she asserted. “Those who successfully obtain the coins race to eBay to sell them at exorbitant prices and high profits.”

The veteran coin editor suggested the U.S. Mint encouraged the speculation by limiting some coins to one person per household. She quipped that dogs, cats and other beings have acquired their own addresses and households in order to get around the Mint’s limits.

While her publication covers major mints all over the globe, Deisher said she finds the problem only occurs at the U.S. Mint.

Meanwhile, Hanlon suggested, “Congress could give a further competitive edge to the American Eagle bullion products by adjusting the capital gains tax treatment of these investments [from 28% to 15%] to make them on a par with securities.”

“By lowering the rate, Congress could substantially boost the market potential for the America Eagles,” he advised. Hanlon believes bullion sales could easily increase by 30% to 50% to meet investor and collector needs.

“I believe investors would welcome the Mint’s resumption of the production of the platinum Eagles this year, which the Mint halted at the end of 2008,” Hanlon suggested.

He feels the anticipated introduce of a palladium American Eagle coin this year will bring a new dimension to the Mint’s offering. “It will offer investors an attractive price point in relation to gold and platinum, with different supply/demand factors for the metal.”

Ranking subcommittee member William Clay, Jr., D-Missouri, noted that no staff members of the U.S. Mint were present at Thursday’s hearing.

Subcommittee Chairman Ron Paul, R-Texas, said the situation at the Mint is a “reflection of what we are doing to our money,” in particular what he termed a “huge debasement of our currency.”

2011 Medal of Honor Commemorative Coins: $5 Gold Proof and Uncirculated and Silver Dollar Proof and Uncirculated 

The United States Mint will begin accepting orders for the 2011 Medal of Honor Commemorative Coins on February 25, at noon Eastern Time (ET).

Public Law 111-91, the Medal of Honor Commemorative Coin Act of 2009, authorizes the bureau to mint and issue a maximum of 100,000 $5 gold coins and 500,000 silver dollars:

• in recognition and celebration of the establishment of the Medal of Honor in 1861;
• to honor the American service members who have been recipients of the Medal of Honor;
• and to promot
  e awareness of how ordinary Americans can challenge fate and change the course of history.

The coins will be available in proof and uncirculated qualities. Pricing for the 2011 Medal of Honor Commemorative Coins is as follows:

The introductory sales period ends on March 28, 2011, at 5:00 p.m. ET, when regular pricing takes effect.

Orders will be accepted at http://www.usmint.gov/catalog or at 1-800-USA-MINT (872-6468).  Hearing- and speech-impaired customers with TTY equipment may order by calling 1-888-321-MINT (6468).

All domestic orders will be assessed a $4.95 fee to cover shipping and handling costs.

Surcharges from the sale of each coin-$35 for each $5 gold coin and $10 for each silver dollar-are authorized to be paid to the Congressional Medal of Honor Foundation to help finance its educational, scholarship and outreach programs.

About the United States Mint

The United States Mint, created by Congress in 1792, is the Nation’s sole manufacturer of legal tender coinage and is responsible for producing circulating coinage for the Nation to conduct its trade and commerce.  The United States Mint also produces proof, uncirculated and commemorative coins; Congressional Gold Medals; and silver, gold and platinum bullion coins.

Note:  To ensure that all members of the public have fair and equal access to United States Mint products, orders placed prior to the official on-sale date and time of February 25, 2011, noon ET shall not be deemed accepted by the United States Mint and will not be honored.  For more information, please review the United States Mint’s Frequently Asked Questions, Answer ID #175.

Summary

With mid-term elections over, it is time to look at the numismatic program of the 111th Congress, which will be replaced in January 2011 by a 112th Congress comprised of individuals elected Nov. 2

This article was originally printed in the latest issue of Numismatic News.
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There are a number of numismatic successes, as well as some failures.

In the latter category, to the surprise of many, is a proposal signed onto by retiring Senate banking committee chairman Chris Dodd, D-Conn., for a Mark Twain commemorative. He introduced it and it went nowhere.

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In a possible post-election lame duck session, some of the numismatic proposals might get “clean shaven” – amendments removed  – and moved to passage. Many think Congress could deal with Social Security and tax issues and some numismatic matters might squeak through.

But this lame duck session might be unusual because of the change of party control of the House of Representatives. That affects their ability to move the lame duck items along.

Whatever the outcome of the lame duck session, the successes already achieved include:

•    H.R.621: Girl Scouts USA Centennial Commemorative Coin Act for 2013. Became Public Law No: 111-86.
•    H.R.1209: Medal of Honor Commemorative Coin Act for 2011. Became Public Law No: 111-91.
•    H.R.2097: Star-Spangled Banner Commemorative Coin Act for 2012. Became Public Law No: 111-232
•    H.R.1243: To provide for the award of a gold medal on behalf of Congress to Arnold Palmer in recognition of his service to the Nation in promoting excellence and good sportsmanship in golf. Became Public Law No: 111-65.
•    H.R.2245: New Frontier  (Astronauts) Congressional Gold Medal. Became Public Law No: 111-44. See Page 1 story.
•    H.R.4684: National Sept. 11 Memorial & Museum Commemorative Medal Act of 2010. Became Public Law No: 111.
•    S.614 : A bill to award a Congressional Gold Medal to the Women Air Force Service Pilots (“WASP”). Became Public Law No: 111-40.
•    H.R.1177, the  5-Star Generals Commemorative Coin Act for 2013. Became Public Law No: 111-262.
•    S.846 is a bill to award a Congressional Gold Medal to Dr. Muhammad Yunus in recognition of his contributions to the fight against global poverty. Became Public Law No: 111-253.

Pending matters include:

•    Coin Modernization, Oversight and Continuity Act of 2010, H.R. 6162, had its contents gutted and was rewritten. It now proposes a mechanism to change coinage alloys, deal with various  metal issues inside and outside the Mint. Subcommittee Chair Melvin Watts wrote both the bill and its new language as an amendment. It passed the House Sept. 29. Most likely it will have to have another go next year.

•    Watts also introduced the amended, H.R. 6166, the American Eagle Palladium Bullion Coin Act of 2010, which first calls for a marketing study then specifies how the coins are to be designed and production specs. That also passed the House Sept. 29 and is pending.

•    H.R.2421, the Mother’s Day Centennial Commemorative Coin Act. Passed the House in 2010. Still pending in the Senate.