Is the Massive Silver Shortage Real?

   There have been rumors and accountings of a growing shortage in physical silver for a few months. Interestingly, the U.S. Mint released an announcement in mid-December that the 2012 silver eagles were sold out and that no more silver eagles would be sold until the release of the 2013's on January 7.

   Keep in mind that, technically, the U.S. Mint is required by law to produce enough silver eagles to meet demand. It for sure can fulfill this requirement by taking orders for the 2013's in advance and producing enough coins to meet that demand when it releases the 2013's. It certainly raises the question of why didn't the Mint produce more 2012's, especially given that silver eagles sales were pacing toward the 2nd highest annual total ever (2011 was the highest). Surely the Mint could have produced a surplus of 2012's before curtailing production to set up for the changeover to 2013's.

   The 2013 silver eagle sales kicked off with a one-day record sales of 3.9 million coins. In less than two weeks, authorized dealers had ordered over 6 million coins, by far a monthly record-setting pace. And on January 18, the Mint announced that silver eagles would be suspended again until January 28.

   Now, unless the Mint managers are completely incompetent as businessmen, why did they not mint enough coins to meet the initial demand, with full knowledge that there would be pent-up demand plus the usual high demand when a new year is released? Remember, by law they must produce enough coins to fulfill demand.

   The only plausible reason is because the mint was unable to get enough of the silver blanks they use to make silver eagles. And the only reason for this I can think of is that the silver shortage we've been hearing countless anecdotes about is real.

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