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Trillion Dollar Coin

Here is CNN's take on the story.

They don't give any details while saying that since the money from the coin would never go into circulation it would not cause any inflation.
 
rjh01 said:
Another alternative is to produce a billion coins and sell them to collectors for $1,000 each. Have the face value say $100 so that they are not actually used. That would get rid of almost a trillion dollar debt. It also has the advantage of taking a load of surplus money out of circulation, which might be otherwise spent and create inflation.
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In order to sell them all, you'd have to convince every adult in the USA to buy four coins each. Something of a hard sell, especially since you're charging ten times their face value.
 
Molinaro said:
Here is CNN's take on the story.
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Ahh! It's a legal dodge. The president can issue a platinum coin in any denomination whatsoever without needing congressional approval.

In effect, he would be forcing the fed to do a $1T QE (and giving himself a $1T window before he hits the debt ceiling again).

Molinaro said:
They don't give any details while saying that since the money from the coin would never go into circulation it would not cause any inflation.
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:dl:
 
Brian-M said:
In order to sell them all, you'd have to convince every adult in the USA to buy four coins each. Something of a hard sell, especially since you're charging ten times their face value.
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Send out gov't checks that can only be used to purchase the coins...

Just forgive the debt...

Give every working citizen $100K in grant money that has to be spent in 2013...50% of the grant money spent is sent to the gov't to help with the debt...
 
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LTC8K6 said:
Send out gov't checks that can only be used to purchase the coins...
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Let's skip a step, and have the government send itself a quarter of a billion checks for $4,000. :)
 
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ravdin said:
I've been seeing a good bit of buzz lately about the idea of the US Treasury minting a $1 trillion platinum coin as a means of circumventing the debt ceiling debates. The White House even has a petition about it:

https://petitions.whitehouse.gov/pe...single-platinum-trillion-dollar-coin/8hvJbLl6

As best as I understand the mechanism, the Treasury would deposit this coin with the Fed and then it would go into effect as an immediate means of debt reduction. The proponents say: our debt is manageable (as long as interest rates don't go up) and this would avert dangerous fiscal cliff showdowns in Congress. The opposing view is: this is currency debasement and will lead us down the path of Zimbabwe style hyperinflation.

Thoughts on this? I have a difficult time seeing the proposal as anything other than a shell game, but it's not like the debt ceiling is serving any useful purpose for keeping our fiscal house in order.
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I remember this idea came up the last time that there was a face-off over the debt ceiling.

I think the argument against it is that it would be breaking a taboo: The Fed is supposed to control monetary policy, not the president or congress, but this would essentially mean the Obama administration taking direct control over money expansion. That itself does not necessarily make it wrong, but it might be reason to be cautious. The idea of having an independent Fed is to make monetary policy decisions not based on short term political considerations but instead in terms of achieving the Fed's twin mandates of price stability and full employment. It's very tempting for the government to abuse this power. Doing it might spook the bond market.

And if they didn't do it last time, maybe there was a good reason.
 
Brian-M said:
In order to sell them all, you'd have to convince every adult in the USA to buy four coins each. Something of a hard sell, especially since you're charging ten times their face value.
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The numbers are a bit silly. The reason I used those ones are to make the sales equal to a trillion dollars. You could reduce the number made and sold to a realistic number and that would solve a % of the debt problem. The strange thing is that coin collectors (at least in Australia) will pay way more for coins than the face value. These coins are high quality (proof or uncirculated and are made for the coin collectors. See this link for the details https://eshop.ramint.gov.au/Coin-Sets/8.aspx.
 
LTC8K6 said:
http://www.zerohedge.com/news/2013-01-04/putting-trillion-dollars-platinum-perspective

Putting A Trillion Dollars Of Platinum In Perspective
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If the numbers in that story are true, I wonder why platinum is so cheap compared to gold?

Supposedly there are only 16 tons of platinum in the world, but there are 165,000 tons of gold. And yet the price per ounce is almost the same.

According to this, 133 tons of platinum are mined every year, so there must be more than 16 tons of it.

ETA: He also fails to understand a basic concept: A trillion dollar platinum coin does not imply that there is a trillion dollars worth of platinum to back it up because we are not on a platinum standard. Just as a hundred-dollar bill does not imply that the paper it is printed on is worth $100 or that it can be redeemed for $100 in gold or any other precious metal. This is still fiat money, even if it is a coin made of precious metal.

ETA2: Even the link he gives as a source contradicts itself on this point:
The annual production of Platinum is about 130 tonnes. While this seems like a substantial number, it pales in comparison when you realize that nearly 260 tonnes of steel are used in U.S. manufacturing operations daily.
All of the Platinum ever mined would barely fill a 25 cubic foot (7.6 cubic meter) box. The block would weigh over 16 tons.
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If 130 tonnes (a 'tonne' is more than a 'ton' btw) are mined every year, then clearly there are much more than 16 tons "ever mined".
Furthermore, 25 cubic feet does not equal 7.6 cubic meters. There are over 35 cubic feet in one cubic meter. It probably should be a cube of 25 feet per side, or 15,625 cubic feet.
 
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BenBurch said:
The full faith and credit demands that money be coined in the face of GOP intransigency.

So do what is right or be run around. It's not optional.
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In what way is ballooning our already outrageous debt and sticking future generations with the tab doing what is right?
 
BenBurch said:
Actually, this is merely inflationary. By removing the issue with the debt ceiling, the opportunity then exists to make sure you never need to do it again.
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What does "merely inflationary" mean? It's inflationary to add a trillion dollars into circulation by fiat, but the whole point is to make it possible to accumulate more debt without hitting the debt ceiling. This doesn't stop the debt from growing or remove the crushing obligations we're passing on to future generations for own selfish benefit, however.
 
rjh01 said:
The strange thing is that coin collectors (at least in Australia) will pay way more for coins than the face value. These coins are high quality (proof or uncirculated and are made for the coin collectors. See this link for the details https://eshop.ramint.gov.au/Coin-Sets/8.aspx.
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I've seen similar sets on display for sale at the post office: http://shop.auspost.com.au/collecta...ogle&mkwid=sz9WXUAmX|coins|b|pcrid|6650028506

Not sure how many people who visit the post office actually buy them. Can't be that many. But I suppose that even one person in a thousand actually bought them, it'd make it worthwhile stocking them.
 
Oky doky, I'm not much of a grand economist , so answer me this:

IF they made this trillion dollar coin, deposited it, then 6 months later it was "stolen" and melted down what would that do to the economy?

Would it be the same as if one trillion cash dollars were suddenly burned?

How would that work?
 
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