Copyright © 2008 November 2008THE MORGAN REPORTWWW.SILVER-INVESTOR.COM3
been selling 60,000 ounces a month in August and inSeptember.“Question: How is it possible that a country which is eitherNo. 1, or No. 2 (Perú sometimes exceeding Mexicanproduction) cannot supply silver coin?“Question: Is there some sort of agreement at high level,to restrict the amount of silver coin that the population canobtain?“Question: Does this measure go beyond the scarcity ofsilver at the present ‘paper price’ of silver, to a deliberaterestriction of silver coins to be placed in the hands of thepublic?“This restriction on supply on the part of the Banco deMéxico, which mints the ‘Libertad’ ounce, is disturbing tosay the least.Hugo Salinas PriceThis came in at the last moment:“We've been informed that the Bank of Mexico isexplaining the measures it has taken to restrict access by Mexicans to possession of Libertad ounces, as follows:‘The House of Money has an excess of work and becauseof this it cannot mint the coins which the public isdemanding.’”Then we received this from a reader about the Perth Mint.“Looks like the Perth Mint is shifting production to just 1-ozroos? The newsletter I get from a dealer had the followingat the end. Demand must still be going gangbusters.‘Quote:‘
Important Update- As of today 20th October 2008 thePerth Mint has halted production for any new orders of allbullion gold & silver coins except for the 1oz GoldKangaroo’s. This decision has come in the wake of unprecedented quantities of orders which the Perth Mintare currently working on filling by striking more coins 24hours a day 7 days a week. We will be able to take ordersfor 1oz Perth Mint Gold Coins locking in prices howeverthey will incur delays in delivery beyond our control.
’”Then I received this, from India no less, wanting to buy 10tons on a monthly basis.“Our requirement at the moment will be around 10 tonnes(10,000Kg) for our firms at Delhi, Ahmedabad, and Jaipurper month. Please be informed that direct import of silveris not allowed in India. It has to be routed through Banksin India which we will arrange. You have to ensure that thesupplier is of repute and the goods are LBMA certified sothat our bank do[es] not hesitate to get into a deal with thesupplier. Currently we are importing silver from AGR MATTHEY for your information.”Of course we know that the U.S. Mint is stated they are notminting any more gold or silver for a while, and BillMurphy had this comment, “Regarding the ‘blanks,’ theMint says it doesn’t have to keep up with Gold Eagle,Buffalo coin demand, even normal demand. They areavailable, but the Mint won’t pay the premiums others willto get the supply. There is NO shortage of blanks. What afarce!”So if we looked from an extreme perspective we mightconclude that Mexico, the U.S., and Australia are allworking at capacity and cannot meet demand, or perhapsit’s something to the effect that those governments do notwant a rush into gold and silver to take place? Regardless,people all over the world are seeking to hold the realmetal.Many have started to take delivery from the COMEX andthis is the best way to buy physical at the lowest premium,but these are roughly 1000 troy ounces. As far as resellingthese bars, personally I have never had a problem buthave not sold back to the COMEX, just to some of themany dealers I know on a first-name basis. In these cases,as long as the bar is stamped with a COMEX-knownhallmark, they are happy to pay spot price or perhaps afew pennies less.If this type of demand continues, it has to be puttingpressure on the silver market, and if perhaps as little as 25million ounces were moved off the Exchange, it might beenough of an impact for the COMEX to put an end to thedelivery option—something many of us have stated was adistinct possibility. Were this to happen, the physicalmarket would most likely explode, because the perceptionwould become reality: “Silver is indeed scarce and now Ido want it!”However, I wish to explore the idea that Hugo SalinasPrice posed, namely, “Is there some sort of agreement athigh level, to restrict the amount of silver coin that thepopulation can obtain?” We do NOT want to state this isthe case but merely wish to explore what this could meanfor the COMEX. If this were true it would put the COMEXin a very interesting spot, because wouldn’t this mean they too could be asked to slow down or stop delivery ofcommercial silver bars?Finally, Jim Sinclair states, “Gold is a currency. Papercurrency insures nothing. Gold is insurance. Gold is not acommodity. Gold will trade at a minimum of $1650