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Expect shortages of precious
metal coins worldwide should investment demand jump dramatically as a result
of another financial crisis.
According to The Perth
Mint’s Bron Suchecki,
probably less that 2% of people started buying precious metals during the
financial crisis in 2008. The result was rationing of coins by mints!
In a telephone interview with
the Financial
Survival Network, Bron questioned what
would happen should serious, mass market demand like that seen at the end of
the 1970s re-emerge.
Despite better preparedness
among mints generally for this possibility, Bron
told Kerry Lutz there remains a huge potential production bottleneck problem
that investors would do well to be aware of.
While coining is a fairly
straightforward process, he said, the manufacturing of precious metal blanks
was a much more complex and time-consuming process. As a result, a lot of
mints don’t have the scale or expertise to become involved in this
aspect of minting and were therefore reliant on a handful of operations for
supplies.
Kerry Lutz revealed that the
U.S. Mint, for example, relies on just three suppliers, including The Perth
Mint.
Bron’s message to investors? If you foresee
another major crisis, buy now to avoid the certainty of increasing premiums
as coins become scarce.
Listen to
the full interview here.
Gold
futures declined overnight in New York by US$1.20 to settle at US$1,576.20 an
ounce. Silver
slid 23 cents to $26.811 an ounce.
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