perth mint has run out of silver bars, page-53

"If there really was a shortage and you were the supplier, I can guarantee you would be raising prices to reflect this. Why isn't this happening at a higher level (where Perth mint sources silver from)? For Perth mint, they have a reputation to uphold, they would be slammed if they said we're upgrading our production capacity, but in the meantime we're going to jack up the prices due to not being able to keep up with demand"

Interesting question. Price is a two way street, formed by interaction of both buyer and seller. On the supply side, there are two ways to bring demand in line with one's limited production capacity - 1 increase (premium) prices or 2 ration/run out. I have argued for 1, but internally the view taken is as you have stated above.

I guess the underlying reason for the ration approach is that buyers won't accept higher prices above (paper) spot. This is confirmed by the fact that buyers aren't offering to pay us more for immediate delivery. If our telephone sales people reported to management that buyers were so desperate for retail forms of physical that they were offering to pay more then maybe we would increase premiums.

The conclusion is that while buyers may complain about "fake" paper prices vs physical prices, when push comes to shove they aren't prepared to pay more.

As to our supply, we did have retail product available last week. I don't know if it is still available. We do take back orders but the recent demand was so big that we had to stop with back orders as the delivery times would have just become way too long.

"the 1000oz bars bron is talking about are only available for storage at the perthmint, the perthmint will not sell them to you."

We will sell them to you, just for storage. You could always take delivery in 3-6 months. 1000oz bars are not sold retail as I said because of their physical and dollar value size. That doesn't mean we don't sell them in wholesale lots (eg 1 tonne).