jason hommel just finished selling junk silver, eagles and bars at acution, and sums up why bullion is selling at a premium to the spot price:

The biggest reasons why product dried up, and premiums went so high, is that there was a confluence of several factors:

1. Major new public buying, starting when gold hit $1000, and silver hit $20 earlier in this year. 2. Existing dealers who are teetering on bankruptcy due to the rising market prices, lack of public selling, major increases in public buying, and changes in premiums. 3. Low levels of regular new manufacturing, which was decimated by the former public selling, or "dumping" of real product. 4. Manipulated low prices from futures contract selling that did not provide any new silver to the market, at "below" market prices, which used to come in from public selling.

All of this ought to give confidence to silver buyers today. These are historic low prices for silver, even the premiums. Premiums will not drop below 20% minimum until the public starts dumping, once again, and that probably won't take place until after a major price run up, at the end of this bull market in silver that ought to last about another 15 years. And premiums need to maintain at about 30%, to encourage new manufacturing of new silver products.

http://silverstockreport.com/2008/hi...