Tuesday, July 24, 2012
Bron Suchecki of the Perth Mint – Expect Precious Metals Shortages During The Next Crisis
Bron Suchecki, who’s in charge of strategy for the famed Perth Mint, is warning all precious metals investors that the next crisis will lead to heightened precious metals demand so expect shortages and mint rationing.
This is exactly what happened in 2008, and the next crisis could very well be worse. Interestingly, the shortages emerged not from a shortage of raw materials, but due to a lack of fabrication capacity.
The blanks or planchets that are required to stamp coins are in limited supply. There aren’t a lot of producers around the world, and they have been knwon to invest large amounts of capital towards ramping up production. This is due to the market’s unpredicatable demand curve and the high costs of expansion.
The result is that the distribution system works great in times of regular demand, but it quickly breaks down when demand spikes. Remember, we told you it was coming.
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