That’s a lot of silver Eagles

With the end of rationing of the silver American Eagle bullion coins as of June 2, I wondered what kind of demand it would take for the Mint to once again be overwhelmed, requiring the return of rationing.

It has become quite a high bar for bullion buyers to jump over.

Last year the Mint sold a record 42,675,000 silver American Eagle bullion coins.

It has arranged things with blank suppliers now to have an annualized capacity of 57.2 million pieces, which if every one sold would represent an increase of 34 percent from last year's sales level.

That’s huge.

The Mint issued a statement saying, “Our silver blank suppliers, particularly Sunshine Minting, Inc. and Leach Garner, have worked hard to increase their capacity to supply blanks to the United States Mint. We continue to attempt to identify additional blank fabricators for many of our coin products, including silver, and have received sample blanks from several companies attempting to become a supplier to the Mint. The number of blanks that the Mint has been able to procure this fiscal year averages 1.1 million per week, thanks to efforts made by the fabricators to increase production capacities. Those numbers could grow as high as 1.4 million blanks per week as the vendors continue their efforts to increase capacity.”

The 57.2 million capacity figure I calculated from the lower 1.1 million weekly number.

Using the 1.4 million weekly number, the Mint would have a capacity of 72.8 million one-ounce coins, which is 70 percent more than was sold in 2013.

Is that kind of demand even plausible?

It is if we ever experience a financial crisis of the kind that hit the world in 2008. And, of course, that is why certain investment advisors predict such a crisis in order to attempt to push silver bullion coin sales even higher.

If we ever reach such a high bullion Eagle number, we will be back in the territory staked out by the Mint in 1921 when it coined almost 87 million Morgan silver dollars to replace coins melted under terms of the 1918 Pittman Act.

Of course, in 1921, the public did not want the coins, unlike the bullion Eagles of today. They were used to back Silver Certificates and sat in vaults.

Bullion Eagles don’t back paper money, but in the minds of buyers they offer protection from the possibility of too much paper money being issued by the federal government.

That particular worry might be ebbing at the moment as only 1,345,000 American Eagle bullion coins have been sold so far in June to the Mint’s Authorized Purchasers.

But with two-thirds of the month yet to go, it would be unwise to read too much into a few days’ worth of sales.

Buzz blogger Dave Harper is winner of the 2013 Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."