How Supply Chain Issues Affect U.S. Mint Production

Supply and demand can be a delicate ecosystem. We have seen a motley array of product shortages spurred by pandemic-related supply chain disruptions. It seems that industries across the world are spiraling into a supply chain crisis. From bicycles to ammunition to toilet paper to baby formula to lumber and even coins, the rift between supply and demand has created manufacturing ripples that consumers everywhere are feeling. Let’s take a look at the factors contributing to nationwide shortages, particularly how global supply chain shortages have affected coin production at the U.S. Mint. 

Supply chains are networks that connect producers and consumers through the production of goods and services. Before the Industrial Revolution, supply chains were shorter and more localized. They were also more secure. In a more specialized, post-industrial society, our supply chains have become longer, more interconnected and globalized.

Supply chain issues usually occur when some disruptive factor makes it so supply can’t keep up with demand, like when a raw material needed for manufacturing is not available in sufficient quantities. Shortages can also happen if there is a disruption to the supply chain itself, such can be the case due to political instability or natural disasters that make transportation difficult. Depending on the extent of a supply chain’s reach across different industries, downstream effects are felt in varying degrees. If there was a gold shortage or difficulties transporting newly mined gold to its manufacturing destinations, industries that use gold as a raw material to produce goods would be impacted. Some industries may be able to make use of other sources of the material, while others would leave supply chain management scrambling for alternatives.

Global supply chain shortages do not entirely correlate to supply chain issues at the U.S. Mint. Circulating coins need to be exchanged as a form of currency to fulfill their supply chain role. With coin-circulators (consumers) staying home during the COVID pandemic, hand-to-hand transactions significantly diminished. When the country went into lockdown, many of our coins did too. 

However, the deceleration of circulated coins in the supply isn’t an entirely new trend. In 2018, the U.S. government, alongside financial institutions and industries, attempted to resolve the issue of pumping out new coins to offset stay-at-home coins. The problem is that with a lower monetary value than circulating paper money, metal coins are often overlooked or neglected. Our metal coins are a settlement currency — the inconvenient change received from paying for your Starbucks order that collects under couch cushions and piggy banks. Sometimes, quarters may carry a precious value, such as at the laundromat or when vending machines are an appealing option for convenient goods. But when it comes to pennies, nickels and dimes, many of us can’t be bothered to return them to the supply chain through transactions. 

Furthermore, because of coin-lobbying interest groups and affected industries, like the zinc industry, the U.S. Mint is ordered to keep up annual production. This continues in spite of what seems like an inevitable currency extinction. While shiny new coins are being circulated annually, there is little incentive to get coins occupying car ashtrays, lodged between cushions, and accumulating in rainy-day or college funds at home recirculating in the supply chain. 

Regardless, a pseudo shortage can be just as dangerous as an actual shortage. Perception can create reality through a self-fulfilling prophecy that can lead to the same consequences of an actual shortage.

A testament to the resilience of gold is apparent through its ability to withstand the rise and fall of empires, as well as its ability to serve as a hedge against inflation during times of economic turbulence. While ordinary pennies and nickels continue to be debated for elimination or even a possible composition change, gold coins provide savvy investors with the opportunity to build wealth. You can invest in gold by purchasing gold bullion or numismatic gold coins for sale. Diversification is the key to strengthening both supply chains and your own investment portfolio.

Investors looking to diversify their portfolios with precious metal assets need a reputable gold dealer they can trust. The U.S. Gold Bureau aims to continuously raise the bar by bringing integrity and expertise to each step of the precious metals acquisition process. Each of our licensed precious metals experts is extensively trained to assist our clients at all stages of their gold-buying experience. 

The U.S. Gold Bureau offers a variety of high-quality, investment-grade, and bullion precious metals products. In addition to offering gold bullion, we are listed authorized bulk purchasers of numismatic coins approved by the U.S. Mint. We can guarantee the origin, originality, purity, and quality of each product we sell.  

Don’t short yourself when it comes to the future of your investments. Contact us today for more information on how to leverage your gold investment.