My motivation for recommending the restructuring of the US Mint was when they announced that proof silver and gold American Eagle coins will not be produced in 2009. The logic of the decision in the context of what we know of the US Mint’s operations was unpalatable.
Restructuring the bullion program is to first acknowledge that it is a profit center for the US Mint. Its sole purpose is the buy precious metals and create bullion coins for sale at a significant profit. In the 2008 Annual Report, the profit on bullion issues was 22-percent over all costs, more than circulating currency or commemorative coins.
The anchor of the bullion program are the American Eagles, which has been the most successful bullion program since its inception in 1986. The program started with silver and gold American Eagles. Platinum bullion Eagles were first struck in 1997. American Silver Eagle coins are one troy ounce of 99.9-percent pure silver. American Gold Eagles contain 22-karat (91.67-percet) of gold balanced with silver and copper struck in 1/10 ($5), ¼ ($10), ½ ($25), and one ($50) troy ounces. American Platinum Eagles are struck using 99.95-percent platinum in 1/10 ($10), ¼ ($25), ½ ($50), and one ($100) troy ounces. This program will not change and the US Mint will continue striking coins to meet the demand.
Under the current law, it is not required that the US Mint strike proof versions of these bullion coins. This restructuring will change this to require a minimum mintage of these coins. For the future, the US Mint will strike proof coins to meet the demand with a maximum number in ounces of metals used. For this policy, it is proposed that 1 million troy ounces of silver be used for proof coins meaning the production will be limited to 1 million coins. Gold will be limited to 500,000 troy ounces of gold across all sizes. Finally, platinum will be limited to 100,000 troy ounces in proof coins.
I am not proposing changes to the 24-karat (.999 fine) Gold Buffalo program.
To complete the transformation, the First Spouse program will be transfered to bullion issues and continue using the same rules as it does today.
This year, the US Mint introduced the 2009 Ultra High Relief Coin. This coin brings to life the Augustus Saint-Gaudens proposed high relief design for his $20 Double Eagle design that 1909 technology could not create. The coin has been praised for its beauty and should be a future Coin of the Year candidate.
The concept of creating special bullion coins like the Ultra High Relief coin is something that a new bullion program can do. The US Mint, with direction from the CCAC acting as the US Mint’s Board of Directors can authorize new bullion coins that will allow the US Mint to create new collectibles that could be marketed to a wider audience. In addition to special strikes, the new bullion program can include coins with privy marks, special reverses, enameled coins, even coins made from multiple materials.
Examples of what could be accomplished can be seen in the 2007 Coin of the Year and 2008 Coin of the Year candidates. Although there are wonderful single metal coins, there are some wonderful coins using other design elements. In fact, the the 2009 Coin of the Year award was given to the 2007 Mongolia Wolverine coin with diamonds for eyes that is very intriguing when seen in hand!
It is not my intent to tun the US Mint into the non-circulating legal tender (NCLT) producer like the Royal Canadian Mint who is known to produce a large number of bullion-related issues. The CCAC should limit the introduction of bullion issues to a few a year and limit the number of coins that could be produced for each type. But if the US Mint can find influence in more areas than classic US coinage to produce beautiful collectibles using bullion metals.
Before I forget, these coins are bullion collectibles sold as a profit for the US Mint. They are not commemorative coins and not subject to the fundraising considerations proposed for commemorative coins.
Although the US Mint has been the focus of this series, we cannot reform America’s currency without considering paper money. Next, I will look at the Bureau of Engraving and Printing and what to do with Federal Reserve Notes.