Ranting Andy: Alert! APMEX, Overwhelmed by Physical Buying, Ran Out of Silver Eagles!

RANTING ANDY – After last week’s COMEX shenanigans, wherein the U.S. government (er, JP Morgan) illegally raided silver prices to try and stave off the inevitable COMEX default, I figured I’d watch physical silver buying this weekend to see where the REAL markets would shake out.

Yesterday (Saturday), 2011 silver eagles on APMEX were priced “as low as $5.29 over spot”, which means essentially $5.29 – $8.00 (15%-22%), depending on how much you buy and your method of payment, with an “expected delivery date” of May 13th  (really a euphemism for “we hope to have it by then, but no guarantee”).

Today, however (Sunday), see below.  They raised their prices by $0.20/coin and, more importantly, shifted their expected delivery date out to May 31st!  Moreover, as you can see in the “Just Listed” section in the left, they are now offering to buy Silver Eagles from customers at $37.65, or spot +$2.00.  They desperately need coins, but took a bath last week buying at the highs and thus need to be more cautious here.

As for Silver Eagle monster boxes (500 coins), APMEX currently has nearly nothing in inventory, just a few older ones which I’m guessing are odd lots sold to them in the past few days.  And once again, if you want to buy these rare IN STOCK items, here’s what you pay:

I’ll do the math for you:

2006 (just two in stock), price per coin, ῀$59 (PREMIUM OVER SPOT – 66%)

2003 (just one in stock), price per coin, ῀$57 (PREMIUM OVER SPOT – 60%)

1998 (based on the language, guessing just one in stock), price per coin῀$55 (PREMIUM OVER SPOT – 54%)

1991 (based on the language, guessing just one in stock), price per coin῀$52 (PREMIUM OVER SPOT – 46%)

And I’ll bet they’re gone by tomorrow morning!

On eBay, BTW, the average price paid yesterday (Saturday) for SIZE silver eagles (20+ coins) is about $42.50, and I’m sure it’s more for single coins.

As I noted Friday, I bought coins early in the morning at $40.10 when spot silver was $34.00, but I had to buy MAPLES, not EAGLES, as my dealer was out of Eagles entirely with a three-week delay, and as soon as he gets them, says they’re already out the door.  He also said MONEX, one of the largest bullion dealers in the country, is no longer taking Eagle orders, and that APMEX got crushed by buying Eagles at the high (remember, spot + $3 when the price of silver was $49).  Thus, the Cartel actions are killing EVERYONE, and will soon kill THEMSELVES once the world sees the physical panic to buy silver (starting with this weekend’s action) at the bargain prices afforded by last week’s ridiculously blatant, illegal PAPER price raid.

P.S. I had intended to write something longer this weekend about the disconnect between REAL and PAPER prices, and how ultimately this craven, illegal attack on commodity markets this week (particularly silver) will backfire on the Cartel as the world realizes that “paper, spot prices” are meaningless.  But frankly I’m exhausted, and I think this data tells the story well enough.  And, anecdotally, after oil prices dropped 9% on Thursday in the PAPER markets (on fears of POTENTIAL MARGIN INCREASES), I watched my local gas station RAISE its prices on FRIDAY MORNING to a new high for the current move, so it’s not just the PM markets where this disconnect is being seen.

In other words, as difficult as this attack has been to swallow, in some ways I’m thankful as it will only accelerate the eventual demise of the COMEX, and potentially all derivatives-based pricing of commodities.  It is only a matter of time before a major mining (or oil) company demands that its long-term offtake contracts are renegotiated with terms related to a PHYSICAL pricing mechanism, NOT futures, likely first in the PM market due to this ridiculous disparity.  And when they do, we will never again have to care about the COMEX pricing manipulation EVER AGAIN!

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