Washington(Kitco News) - Members of a Congressional panel questioned Thursday why the U.S. Mint has created a shortage of high-quality bullion coins, causing a speculative run-up in value.

The U.S. House of Representatives’ Domestic Monetary Policy Subcommittee was told that the country’s bullion coins are topnotch and have a potential high growth of profitability for the U.S. Mint and for the country. But testimony from the industry indicated there aren’t enough of them.

“The problem is there is high demand, but a shortage of the coins,” summed up Rep.  Ron Paul, R-TX, the chairman of the subcommittee.

The talk of a shortage brought sharp questions from some subcommittee members. “Why is that?” asked Rep.  William Clay D-Mo., the ranking member on the subcommittee. “It’s the Mint’s duty to supply sufficient demand and not to produce a speculative run.”

The subcommittee was told there is great buyer interest in such coins.  “Demand (and sales) of the coins could increase 30 to 50 percent if the Mint would allow U.S. companies to produce more blank (unstamped) coins,” said Terrence Hanlon, President of the Dillon Gage Metals Division, an authorized federal distributor.  “But they’re very arbitrary about it.  For instance, there is only one supplier of the popular platinum blanks and they are located in Australia.”

Rep. Carolyn Maloney, D-NY, wasn’t pleased with the Australian reference.

“In Australia?  Why can’t Americans produce those coins? We need the jobs,” Maloney said.

Ross Hansen, founder of the Northwest Territorial Mint, said more of such coins should be produced in the U.S.  “We can and want to,” said Hansen, whose operation is the largest private minting company in the U.S. “I’ve told the U.S. Director directly many times but he says it isn’t a priority.  The U.S. Mint needs a change in attitude.  Their attitude towards vendors and authorized purchases is often described as surly and arrogant.”

Maloney continued to rail against the Mint. “Mr. Chairman, we need to get the Mint Director in here,” requested Maloney.  But she admitted later that there is only an acting director of the Mint; “it’s an appointed position and Senate approvals are behind,” she explained.

 

 

By Peggy Orchowski; reporters@kitco.com

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