Category Archives: JHCB News

New Design For 2021 Silver & Gold Eagles

The United States Mint recently announced there will be new reverse designs for the popular Silver and Gold Eagle bullion coins in 2021.

In 2021 both Silver and Gold Eagles will be celebrating their 35th anniversary which is one of the two oft stated reasons for the design change. The second and more likely reason for the design change is to deter the frequent counterfeiting of these coins.

The current Silver Eagle reverse and Gold Eagle

The current Silver Eagle reverse features a heraldic eagle and the Gold Eagle reverse features a nesting eagle. Their reverse designs are essentially the same as the original 1986 issues. Although the specific changes have not been released as of this writing the new design will by law include an Eagle. The revised bullion coins will also have multiple security details to combat counterfeiting. In recent years both Silver and Gold Eagles have been increasingly reproduced illegally, often made of cheap base metals and frequently originating in China. Although easy to detect by experts, these fakes have been widely distributed worldwide to the masses primarily using online selling sites. The U.S. Mint hopes to curb or eliminate this practice with anti-counterfeiting measures.

New Canadian Designs

So, what anti-counterfeiting measures will the U.S. Mint take? Some of the new security revisions will understandably remain secret. The design change is an obvious measure but it?s likely the U.S. Mint will borrow technology from our northern neighbors at the Royal Canadian Mint. The Royal Canadian Mint uses a difficult to detect process known as micro engraving on its popular Silver and Gold Maple Leaf bullion coins. The Royal Canadian Mint also uses highly polished and textured dies making their bullion coins more difficult to replicate. It is probable that these and other unpublicized measures will be incorporated into most higher value U.S. Mint issues in 2021 or soon thereafter, beginning with the highly popular and liquid Silver and Gold Eagle bullion issues.

Jack Hunt Coin Brokers will be amongst the first in the world to offer these new varieties to both collectors and investors alike. Jack Hunt Coin Broker is one of only a few U.S. Mint Authorized Purchasers of Silver and Gold Eagles in the world. For you the consumer, that means any Eagles purchased from Jack Hunt?s came directly from the U.S. Mint?leaving no question as to their authenticity. Please contact us by early January 2021 for specific pricing and availability information.


Gold, Silver and the U.S. Dollar

There are many drivers of precious metal prices, such as global economic growth, supply and demand, inflation expectations, interest rates, geopolitical turmoil, etc. However, one of the primary influences on the price of gold and silver, that investors must always keep their eye on, are movements in the global currency market and especially the U.S. Dollar.

How the U.S. Dollar Affects Gold and Silver Prices

The U.S. Dollar is the base currency for both gold and silver. This means in the global commodity markets gold and silver are generally bought using U.S. Dollars. Therefore, if the dollar weakens, gold and silver become cheaper to purchase and metal prices generally increase. Whereas if the U.S. Dollar strengthens it becomes more expensive for investors to buy gold and silver and on average precious metal prices will drop.

u.s. dollar vs gold comparison chart 1995-2016

As the value of the dollar increases, the price of gold decreases, and vice versa. [Macrotrends]

While this partially explains the negative correlation between gold and silver and the U.S. Dollar there is more to it. The key driver behind the value of the U.S. Dollar is the level of the U.S. benchmark interest rate established by the Federal Reserve. This is because the more interest one receives for holding U.S. Dollars, a greater number of people will be exchanging their money into U.S. Dollars. Therefore, a rise in U.S. benchmark interest rates, or an indication that a rate hike is near, historically strengthens the U.S. Dollar. This in turn will weaken gold and silver, not only because it becomes more expensive to buy precious metals, but also due to the opportunity cost of owning a non-interest bearing asset. If holding the U.S. Dollar pays you reasonable interest, then holding precious metals becomes less attractive as they obviously pay no interest.

Gold becomes stronger as U.S. Dollar weakens

Movements in the U.S. Dollar tend to have a strong negative correlation with the price of gold; the gold price can also affect movements in other currencies, especially those in emerging markets. During times when a countries domestic currencies are weakening dramatically, central banks tend to buy gold to compensate for that loss in value. This was witnessed recently when the currencies of Malaysia, Indonesia, and Thailand all saw a dramatic drop in their value in relation to the U.S. Dollar. As a result their central banks as well as many emerging market investors subsequently began buying physical gold as a safe haven investment and hedge against their local currencies.

Gold became an increasingly attractive option to emerging market central banks and individuals as well due to its strong performance in 2016 to date. Furthermore, countries suffering with high inflation tend to buy gold as an inflation hedge. Since gold is liquid and frequently traded it is often viewed as an alternative currency. For developing countries with volatile currencies gold has become a popular investment with central banks, especially in times of U.S. Dollar weakness.


Gold, Silver & Negative Interest Rates

Could negative interest rates be on the horizon? As we discussed in a recent article on this site, a documented “war on cash” has already been initiated in several countries worldwide. In Sweden, Switzerland, Denmark and the euro zone, central banks are using negative interest rates policy (NIRP) as a primary weapon in trying to force feed stagnant economies into growth. Here in America, Janet Yellen recently said that if circumstances warrant, negative interest rates are ?on the table.? Another Federal Reserve governor was quoted last fall as stating ?negative interest rates are inevitable in the U.S.? The same thought process is in play at the Bank of England.

How Negative Interest Rates Could Affect Banking

Some highly respected central bankers and influential financiers have suggested that negative interest rates should also usher in the abolishment of cash, a topic we recently elaborated on at this site. These supposed intellectuals theorize that by imposing negative interest rates on consumers, depositors will spend their money as opposed to paying a bank to store their cash. These same bankers publicly state that the masses won?t object to negative interest rates because currency in a bank is easier to spend than cash in our electronic world. The truth is more likely that central bankers and federal governments simply want to abolish cash and go to an all-electronic form of currency. Imposing zero or negative interest rates is major step in attaining that end result.

I believe that depositors will not view money in the bank as a convenience because they can spend it more easily. Much of the world is cash-poor already and they won?t give up their cash for a perceived convenience. The public will ultimately find alternatives to avoid paying a fee, in this case negative interest, to a bank that is likely already robbing them with ATM fees, minimum balance fees, etc., etc?

Think about it from your own personal perspective. What would you do if all the banks announced that, at the start of the business day tomorrow, all your deposits are now subject to various fees and charges equating to negative interest rates? From now on you will essentially pay the bank to warehouse your money, much like some individuals pay the local self-storage facility to warehouse boxes of their junk.

Are you really willing to pay your bank to store your money? I doubt it. Since this is an arrangement never envisioned or experienced in the history of America, bank customers will likely yank their cash out of the bank, assuming the cash is actually there. They will store it at home or move it into assets that will hopefully maintain its value such as collectibles, gift cards, cashier?s checks and of course precious metals.

An Argument For Gold and Silver

This is not a hypothetical essay on eliminating cash. Negative interest rates and cash elimination are under serious discussion by central bankers and influential politicians worldwide. There are several European consumer banks already committed to imposing negative interest rates on depositors this year.

If there ever was a message that makes a clear-cut argument for buying gold and silver, this is it. In a world where your bank deposits effectively lose money annually, the 0% interest that gold earns annually suddenly doesn?t look so bad. If negative interest rates are the next stage of the global financial crisis, gold and silver may become one of the only forms of money to protect you.

By Douglas Trinder, Precious Metals Analyst, Jack Hunt Gold & Silver


War on cash

There appears to be a growing war on cash as evidenced by more frequent reports in the mainstream media suggesting central banks and federal governments are supporting the banning of currency (cash) in the foreseeable future. Consumer spending in most developed countries makes up at least 50% of the Gross Domestic Product. However, with sluggish growth at best in most developed countries, the ?powers that be? are looking to encourage the populace to spend money rather than save it. Thus the motivation for the war on cash.

War on cash leads to hoarding

In a world of low, zero and negative interest rates, there is little incentive for the traditional saver to accumulate deposits within the current banking system. Therefore, there is an increasing tendency for individuals to hoard cash or cash equivalents outside the banking system.

Japan’s recent plunge in negative interest rates serves as evidence of this. Since rates have gone negative there has been a significant increase in Japanese citizens withdrawing large sums of cash from their banks. In addition sale of cash equivalents, especially gold and silver bullion, have taken off. Interestingly the sale of home safes has boomed as Japanese citizens need a secure means to store the cash and/or other cash equivalents they are accumulating to replace their bank deposits. The main point here is that hoarding cash as a result of low or even negative interest rates is exactly what the ‘powers that be’ want to prevent.

Cash withdrawals, deposits and your local bank

Examples of the war on cash already exist. Have you tried to withdraw or deposit more than a few thousand dollars in cash at your friendly local bank lately? Good luck with that! Besides rejecting your request there is a very good chance that the bank will file a Suspicious Activity Report (SAR) with the Financial Crimes Enforcement Network (FinCEN) based upon your request. By the way, you will would never know if it happens. Banks face severe penalties if a customer is ‘tipped off’ to the filing of a SAR.

Even here at Jack Hunt Gold & Silver our hands are legally tied if a client attempts to spend $10,000 or more in currency for ?related transactions? within a calendar year?.unless of course you want to fill out the IRS Form 8300. The Form notifies IRS of a large cash transactions and opens customer reported to further government scrutiny.

Classic Keynesian economic theory suggests that if cash was banned everyone would be forced to have a bank account. If everyone had a bank account banks could offer low, zero or negative interest rates with the expectation that people would rather spend their money, thus stimulating the economy, as opposed to losing money with zero or negative interest rates. However, it?s this monetary philosophy that has put the world into unsustainable and unserviceable debt and perhaps has fatally damaged the global banking and financial system.

Benefits of the war on cash, not for you and me

The primary supporters of eliminating currency, which include most developed debt ridden governments, central banks and credit card companies look forward to the following benefits of banning cash:

1. It would assist banks in meeting minimum reserve requirements.

2. Banks could use greater deposits to leverage credit and increase profits.

3. It would be easier to control and manipulate any future bank runs.

4. Makes bank ?bail-ins? more effective.

5. Finally, a society with no access to cash is more easily controlled, making it easier to collect taxes and monitor all aspects of individual and corporate finances.

It?s interesting that these benefits go far beyond the stated benefits of a cashless society. Mainly that only tax evaders, drug dealers and terrorists use large sums of cash. The idea that an individual would want to keep their money in cash outside a bank because of perceived risk holds no merit. If you want to hold large sums of cash it?s assumed that you are a criminal.

The war against cash is yet another argument in favor of individuals purchasing and accumulating tangible gold and silver bullion, and storing it outside the banking system.


Bail-Ins, Coming to a bank near you?

Following similar steps already taken in United.States the European Commission recently ordered 11 members of the European Union (EU) to enact the Bank Recovery and Resolution Directive (BRRD). These rules theoretically aim to shield taxpayers from the fall out of another banking crisis similar to the recent fiascoes in Cyprus and Greece. The BRRD mandates that if a future banking crisis develops governments will not be obligated to prop up the banks. At any rate most countries are so far in debt that they would not have sufficient assets to bail out even a small regional bank. Instead the burden will be put on creditors and depositors to bail-in their troubled bank. In simple terms legislating bank bail-ins aims to remove government responsibility when a bank fails. This news was not covered by a vast majority of mainstream media outlets despite the serious risks and ramifications for depositors and savers in the United States, throughout the EU, and internationally (i.e. Canada, New Zealand)..

Bank bail-ins, what you don’t know can hurt you

There?s something really important to note here. Most individuals do not recognize that when one opens a bank account they become an ?unsecured creditor? of the bank. Most often this fact is lost in the fine print of the agreement individuals sign when opening a bank account. Under the template of ?bail-in? legislation unsecured creditors of a bank will be the first ones whose deposits will be used (a.k.a. stolen) to prop up a failing bank. In the case of Cyprus, unsecured creditors lost virtually 100% of their deposits over ?100,000 Euros. As most can envision, seniors who were responsible and saved throughout their lives for retirement, were in particular really hit hard by this.

Could it happen in the United States? You can bank on it!

In 2012 the United States’ Federal Deposit Insurance Corporation (FDIC) and the Bank of England co-wrote a paper on how their government’s should address failing banks. The following passage is from the Executive Overview:

“The financial crisis that began in 2007 has driven home the importance of an orderly resolution process for globally active, systemically important, financial institutions (G-SIFIs)… These strategies have been designed to enable large and complex cross-border firms to be resolved without threatening financial stability and without putting public funds at risk…

In the U.S., the strategy has been developed in the context of the powers provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Such a strategy would apply a single receivership at the top-tier holding company, assign losses to shareholders and unsecured creditors of the holding company, and transfer sound operating subsidiaries to a new solvent entity or entities.”

In simple term the United States followed the same template that its European brethren are now using.

Are you vulnerable?

Like the United States, each country in the EU will enact its own version of this ?bail-in? legislation. How vulnerable savers are in a specific country is difficult to tell at this time. However, the worldwide drive towards a cashless economy which has accelerated of late makes deposit holders and savers ever more vulnerable. Allowing for the confiscation of deposits is a retrograde step and may be the last straw for a western banking system already on life support courtesy of central banks. Central banks claim to be averting deflation and recession with quantitative easing (QE) and negative interest rates, not simply bailing out or aiding overly stressed banks. However, recent economic data suggests otherwise.

The Bank’s interest above yours

To reiterate, the current United States/EU legislated bail-in of deposits would again place the interest of banks over those of depositors and savers. Cyprus was devastated by bail-ins and shows little sign of recovery. However, the key lesson from Cyprus and the coming shift from bail-out to bail-in legislation is that a precedent has now been established in terms of deposit confiscation. Therefore, simply having ?insured? deposits in a bank can no longer be considered the safest way to save and protect one?s assets. Conservative wealth management, wealth preservation along with asset diversification should be the critical concerns as it pertains to your portfolio. Gold and Silver can play an important role protecting, preserving and potentially increasing your wealth in the face of the coming bail-in era.


Gold benefits from investor discontent

So why is gold doing so well here in early 2016? As I write this gold is hovering in the low $1200.00 per ounce range, up over 10% year to date, already exceeding the high annual price estimate forecast by many ?experts?. Even though metal prices regressed slightly from earlier highs during the trading days surrounding Valentine?s Day weekend, the week of February 8-12, 2016 was the best week for gold in four years.

The simplistic reason for the upward trend in gold is likely the recent stock market turmoil which historically sends investors into safe haven assets. Gold has benefited along with bonds and the Japanese Yen from the recent rush to safety from equities. Investors are worried about the risk of a global recession as well as the health of several major US and international banks.

93747_Slab

There has been a recent surge in demand for gold bullion coins like the Canadian Maple Leaf.

Investors have been rattled since the Bank of Japan, followed by the Central Bank of Sweden, introduced negative interest rates to try to stimulate growth. Many equity-based investors now fear any further deterioration in US or international economic conditions might result in our Federal Reserve lowering rates rather than raising them. While Fed chief Janet Yellen recently reaffirmed her belief that the US economy is healthy and interest rates will rise gradually, she refused to rule out cutting rates should economic data deteriorate.

Safe haven assets have done well across the board in 2016 as traditional equities have plunged. Treasuries are at their lowest since 2012 while foreign currencies, notably the aforementioned Japanese Yen, are showing renewed strength against the US Dollar. Cash is flowing into gold backed Exchange Traded Funds (ETF?s) at the highest levels since 2011. Assets in the SPDR Gold Trust, the world?s top gold ETF, rose 2% in one day (February 11th), the largest one-day inflow in months. Total holdings in the eight largest gold based ETF?s worldwide have risen by 3.8 million troy ounces this year after three straight years of decline.

One could reasonably conclude that to this point in 2016 Gold is successfully reclaiming its rightful position as the world?s premier tangible safe haven asset. The weak US and global equity markets as well as current gold demand from the public and ETF?s certainly substantiate that idea.

Here at Jack Hunt Gold & Silver we are pleased to note that we have recently reduced premiums on virtually all of our most popular gold and silver bullion products. Please call or stop by to discuss your precious metal portfolio.


100 oz. Hunt silver bar, the real story

 

A blast from the past.

Many of our wholesale and retail customers are unaware that Jack Hunt Coin Broker once produced and marketed of 100 oz. silver bars. It’s come to our attention recently that there are some who mistakenly believe that these bars are a rare collectors item, produced by the infamous Hunt brothers (no relation to Jack).

A little history

The brothers, Nelson Bunker Hunt and William Herbert Hunt, were the sons of oil tycoon Haroldson Lafayette “H. L.” Hunt, Jr. In addition, they were also brothers to Lamar Hunt, founder of the American Football League and the Kansas City Chiefs.

Nelson and William used their vast wealth in an attempt to corner the silver market in the late 1970s. They acquired over 195 million ounces (estimated to be 1/3 of the world’s liquid, non-government held, supply of silver). At silver’s peak in early 1980 their ‘stash’ was worth nearly $10 billion (at $48.70/oz). In March of 1980 the silver market collapsed, loosing an astonishing 80% of its value. As a result both the brothers went bankrupt but ultimately regained their wealth years later.

The real story

Now while it would be a far more interesting story if the the Hunt brothers had minted the 100 oz. Hunt silver bars they were actually produced by Jack Hunt Coin Broker. Their were two versions of the Hunt bar.

Hunt-Bar-Stamp-Feature-Image

The stamp for original Hunt bar now serves as a paperweight in Jack Hunt Coin Broker’s offices.

The first was produced at a manufacturing facility Jack Hunt setup in Upstate New York. The second was produced by Leach Garner in Toronto, Ontario, Canada (just a 90 minute drive north of Jack Hunt’s home office in Kenmore, NY).  Peter Sherlock, Jack Hunt’s former VP of Precious Metals Trading, recalled when Jack Hunt first started production of Hunt bars.

“The fact that the bar said ‘Hunt’ on them didn’t mean anything. There was a shortage of generic silver bars at the time and the Hunt bars were produced in response to the shortage. Eventually the silver market caught up and it was no longer profitable for Jack Hunt to produce its own bars.”

100-oz-Hunt-Silver-Bar

The original 100 oz Hunt bar. Rare but not a collector’s item.

The Original Hunt Bar

Weight: 100 Troy oz.
Fineness: .999+
Dimensions: 155 x 78 x 28 mm
Number Manufactured: Approximately 5000
Manufacturer: Jack Hunt Coin Broker 1981-1982

Hunt-100-oz-Silver-Bar

Hunt Bar Version 2. Also rare and not a collectors item.

Second Version of Hunt Bar

Weight: 100 Troy ozs.
Fineness: .999
Dimensions: 160 x 80 x 25 mm
Number Manufactured: Approximately 5000
Manufacturer: Leach Garner 1982-1983

Hunt to Hunt

On a side note, Jack Hunt was once in contact with Nelson Bunker Hunt. In 1981 they corresponded regarding the sale of US90%. Nothing resulted from their communication but it was a great source of pride the Nelson personally responded to Jack’s inquiry.

Nelson-Bunker-Hunt-Letter

Hunt to Hunt letter dated August 5th, 1981.

Where are they now?

On rare occasion a retail customer returns to sell Hunt bars they originally purchased over 30 years ago. To those customers who still hold their original purchase receipt, we continue to honor the 97% of spot buy back guarantee they were offered at time of purchase. Yet we believe have overwhelming majority of the Hunt bars have since been melted or are buried treasure for future generations to find.

 

Now Available 2016 U.S. Silver Eagles


Silver In The Long Term…Is It Time To Buy?

 

The most frequent question asked of us here at JHCB by the public goes something like this? ?What?s a better buy, silver or gold?? Our simplistic answer is a polite ?We don?t really know?, or a similar non-committal response usually followed up with our question for you? ?Why are you buying precious metals?? We?ve found over the years that our precious metals customers can be separated into two categories. The first group are those looking to make a long term profit buying low and hopefully selling high several years down the road. Our second category of buyers want tangible metals to act as an ?insurance policy? against weakening paper based assets.

This article will focus on why many believe silver is the most attractive precious metal to our clients from the first group I mentioned, those whose focus is solely on profit.

There are several reasons why many believe silver has more profit potential than gold:

1. Silver has dropped in value by nearly 300% since its recent high in 2011, gold has dropped ?only? 35% in the same time frame.

2. The US and most global stock markets appear to be entering into a bear market. In this scenario some paper wealth always moves into tangible wealth with silver being far more affordable to the masses.

3. Numerous charts show silver to be in a technical position similar to 2008. Silver at $9.00 per ounce in 2008 became $40.00 silver in less than three years.

JHGS.US-silver-eagle-20124. Recent history shows that physical silver isn?t always readily available during noteworthy price dips. Physical silver shortages show up in higher premiums above the ?paper? COMEX prices. It is important for the buying public to note: There is no shortage of paper contracts for silver. They can be created in an instant with digital currencies backed by nothing except a compliant central bank. Physical silver cannot be so easily created and consequently can experience shortages. Buy the tangible metal!

5. Most western governments including our own are hopelessly insolvent. Since it would take a rational approach by politicians, and a lifestyle change for those ?entitled? to resolve our debt, it?s safe to assume our financial system won?t be corrected anytime soon. Debt based fiat currencies simply do not stand the test of time.

To those who want to own precious metals, regardless if the motivation is profit or peace of mind, silver offers an affordable option in the realm of liquid precious metals.

 

2016 Canadian Silver Maple Leafs Available Now


Debunking ‘Myths’ of Silver Eagle Supply Issues

2016 1 oz. Silver Eagle

Is the U.S. Mint failing it its mandate to supply Silver Eagles?

Recently on more than one occasion I have come across bloggers essentially claiming that United States Mint is failing in its legal mandate to meet domestic investor demand for Silver Eagles. They argue that this especially holds true when market factors lead to significant increases in demand. Arguments range from poor management to nefarious intent to drive up Silver Eagle prices. As one of only twelve organizations worldwide that can buy Silver Eagles directly from the U.S. Mint, a.k.a. Authorized Purchaser, Jack Hunt Coin Broker has a clear picture of both the supply and demand issues involved with Silver Eagles. There are numerous reasons, that work individually and/or in conjunction that sometimes affects Silver Eagle supply. Consider the following:

1. The United States Mint, unlike almost every other government agency, runs as a profit center. As such, it’s operated like any other business in our capitalist society. It balances supply and demand based upon market conditions. The Mint, like many businesses, does not want to carry excess inventory. What it produces it wants to move. As a result it does not purposely carry Silver Eagle inventory in anticipation of spikes in demand. Instead, the Mint ramps up production in response to increased market demand. This leads into our second point.

2. Silver demand is extremely difficult to predict. Yes, industrial demand is somewhat predictable based upon national and international economies. Yet investor demand is virtually impossible to predict. Spikes in investor demand are most often driven by emotional responses to unpredictable national and international events and/or sudden shifts in either the nation or global economies. Think outbreak of war, political instability, sudden economic downturns, changes in national or global economic policies, etc.

3. In some cases the U.S. Mint cannot meet Silver Eagle demand because of a shortage of blanks. Most do not realize that the Mint does not produce Silver Eagles from scratch. Instead they purchase blanks from private suppliers that the Mint then stamps into Silver Eagle coins. In some instances the Mint’s vendors are unable to fulfill sudden upticks in demand as a result of their own production backlog or reduced supply of raw silver. This ties into the fourth point.

4. Silver mines cannot always keep up with sudden, substantial increases in demand. Obviously this backs up the supply chain that ultimately leads to delays in the production and hence supply of silver eagles. Another point to consider here is the cost of mining. If silver spot prices were to go even lower some silver mines quite possibly could shut down as the cost of extraction becomes too high relative to silver?s spot market pricing.

With these points in mind what these bloggers fail to realize is that when the Mint ramps up production to meet Silver Eagle demand that authorized purchasers often end up with significant levels of excess inventory. The same bloggers who complain the Mint failed to meet investor demand this past summer did not call back in October when demand suddenly subsided and there were plenty of Eagles available in the market.

A final thought. From a retail perspective the most knowledgeable silver investors lean towards buying silver on a regular periodic basis, cost averaging their silver position over long period of time. In the big picture there is less consideration of what is happening in the short term. Of course we get more calls when the market is down on a given day but these same investors do not wait months or years between purchases in trying to buy at the bottom of the market.