If you’re like me, you were disappointed with the fiasco of the pre-sale of the first two Morgan Dollars on May 24, 2021. With the small supply of each dollar (175,000 minted) and huge demand, the US Mint was going crazy with orders. I’m wondering why the small mintage and one person could order up to 10. It’s crazy, right? Who knows how many people tried to order on the website? Turns out there was a reason for the small mintage.
The US Mint Is Running Out Of Silver
After the pre-sale of the two Morgan Dollars, the Mint sent out two email to its buyers explaining the situation. They gave two reasons:
- They claim there was an overwhelming amount of people accessing the website at the same time to preorder the new dollars. I don’t know about you, but this is 2021. This is a federal website that gets an extraordinary amount of volume from time to time. They should had known something like this would happen and increased their bandwidth over the last five months when it was signed by the President. They stated that the level of demand would be determined by the initial release. I can’t believe that they didn’t figure the large number of collectors trying to get these Morgan Dollars. Anyone knows that the Morgan Dollar is one of the most popular US coins.
- They haven’t been getting enough silver blanks from their suppliers. That sounds like a shortage of silver.
As a result, the pre-sale of the remaining Morgan Dollars and Peace Dollar have been postponed. It makes you wonder about silver bullion that will come out this year.
This Isn’t The First Time We’ve Seen A Shortage
The Mint saw a shortage of silver in the early 1960s. After all, silver coins were in circulation since the 1790s. Originally, we got silver from other nations until we found our own. There was talk of bringing back the silver dollar, but it was not to be. This introduced the Coinage Act of 1965 which removed silver from all circulating coins except for the Kennedy Half Dollar which was reduced to 40% silver.
There were other times we would see a shortage including the hoarding of silver during the Civil War and Great Depression. These were the reasons for the new Nickel coin in 1866 and the end of the Peace Dollar in 1935.
Where is Silver Used?
Believe it or not, coins and medals rank second in terms of where silver is being used in the United States. Unlike back in the day when silver coins were released in circulation, today’s silver is mainly seen by the collector. You can get a Silver Proof Set or American Eagle Dollars from the Mint as well as silver Commemorative dollars and Presidential medals.
The number one area where silver is being used is in the electronics field. You can find silver in light switches and microwaves. Even the car you drive contains silver.
Silver can be found on solar panels, soldering and photography. Silver is used in many places not just in the United States, but around the globe. This helps make silver even scarcer.
Could Silver Reach $100 An Ounce?
There are some who say that this will not happen, while others believe this will happen in time.
Let start with the glass half empty crowd. They will say it could spike up again, but just as history has shown, it won’t stay up for long. On January 18, 1980, silver reached its all time high in the United States at $49.45 an ounce. It has had its spikes throughout history, but has always gone back to a normal level.
If you go by what I mentioned earlier about silver being used everywhere and for many things, you may be one of the glass half full crowd.
I did a search in Google for “could silver reach $100 an ounce” to see what others thought. Here’s what I found:
- moneyweek.com (6/22/2020) – “…it is the most fickle and frustrating of metals – it could hit $100 an ounce, or it could send you bankrupt”
- investingnews.com (6/17/2020) – ” There’s a significant length for the silver price to go before it reaches the success (Keith) Neumeyer has boldly predicted…Neumeyer sees US$130 silver in the cards in part because he believes the current market compares to the year 2000, when investors were sailing high on the dot-com bubble and the mining sector was down.” FYI – Keith Neumeyer is the CEO of First Majestic Silver.
- nasdaq.com (10/28/2020) – “Assuming a $4,000 gold price target in two to three years’ time, which is roughly a 100% increase from current levels, and assuming a normalization of the gold-silver ratio to 40-1, then silver should be trading at $100 by the time gold doubles in value, said David Morgan of TheMorganReport.com.”
I even saw a few articles mentioning silver reaching $1000 an ounce. Now I don’t see this happening any time soon. Could you imagine how much gold would be at that point? At least one article was honest about it, and said that silver could be $1000 someday, but not for hundreds of years.
Do You Think About Collecting Silver?
In the past, I have said that I’m more of a collector than an investor, but there’s no problem being both. So far, I have done a full set of Franklin Half Dollars and Peace Dollars. A few years ago, I completed a MS-67 slab set of silver Jefferson Nickels from 1942 to 1945, including the Proof-67 1942-P. Right now, I’m working on a short set of MS-64 Walking Liberty Half Dollars from 1941 to 1947. I’ve got 12 so far, 8 to go.
If you ask my opinion, I think it’s a good time to buy silver being under $30 an ounce. It could hit $100 someday, but it will take some time. With the way things have been going recently, we may see that happening by 2030. Then again, that’s just an opinion.
Have you been or are you considering collecting silver? Let me know what you’re collecting.