[Revi]

What do you think of this? Are we going to try this? And what are the other countries going to do when they hear this? Quadrillion dollar coins?

http://www.theatlanticwire.com/politics ... oin/60583/

[Outcast_Searcher]

What do you think of this? Are we going to try this? And what are the other countries going to do when they hear this? Quadrillion dollar coins?

http://www.theatlanticwire.com/politics ... oin/60583/

Interesting how most of the commenters of both left and right persuasion (when they're not attacking each other) seem to actually get it -- that this is utter nonsense.

What it does is come perilously close to exposing the confidence game -- that the dollar is only worth what the "stewards" on capital hill decree it to be over time via their policies.

And Geithner, our joke of a treasury secretary (the one who can't pay his taxes correctly and who was LAUGHED AT by Chinese teenagers when he called the dollar "a strong currency" in a speech in China -- now is pumping this? Sound money people COULDN'T MAKE THIS STUFF UP.

When even far-left liberal economists like Paul Krugman point out the lunacy of this idea, and admits that it will be inflationary (at some point) -- that says it all.

I'm actually surprised skittish PM bugs haven't moved the PM market a bit on this "news".

[Tanada]

What do you think of this? Are we going to try this? And what are the other countries going to do when they hear this? Quadrillion dollar coins?

The so called loophole was put in the law so that the Treasury could issue platinum coins like the silver and gold coins they sell now for a profit.

The idea that you could mint a small coin and proclaim it to be worth thousands of times its market value is absurd. If anyone is dumb enough to try it then no other government would recognize it. The current spot price for Platinum is within 2% of the Gold spot price. Even if it were back at the 10:1 ratio it has enjoyed now and then that would still be turning a taking a $15,000 metal coin and declaring it a $1,000,000,000,000 value.

Only someone completely isolated from reality would think such a thing is possible.

[TheAntiDoomer]

I don't think you understand how it works. Minting a trillion dollar coin and raising the debt celing 1 trillion is the same thing. Which is why obama should do it.

[Outcast_Searcher]

I don't think you understand how it works. Minting a trillion dollar coin and raising the debt celing 1 trillion is the same thing. Which is why obama should do it.

Sorry, Anti, but I have to go with Tanada on this one.

They are NOT the same thing. And IMO, the difference is NOT just semantics.

Raising the debt ceiling is legally authorizing more US debt (and as a result, more future spending). It is capitol hill officially authorizing a policy. (Borrow to make ends meet).

When the US issues debt, (at least so far) it is issuing a legal document (treasury paper) that it promises its full faith and credit (whatever that should be worth) - to pay it back in "real" US dollars, plus the promised interest on the treasury paper (bonds, bills, or notes).

Now, the implication is that less inflation, the holder of the paper will actually be paid back in kind for what they lend.

....

Now, if we cross the rubicon and say that funny coins, funny hats, or (as I saw on one post in the original link) Obama's soiled boxers are worth (say) $1 trillion dollars -- as I said, we're more or less admitting that the game is up. That we're not even going to TRY to back our dollar with valid assets representing "full faith and credit", or a credible intent to pay.

Now you and I may not believe much in the current value of the full faith and credit today (just like gold bugs and dollar detractors of all stripes). But to me, such games would be a whole different kettle of fish. Like openly admitting that now we're out of ideas and just making this stuff up.

...

The history of booms and busts in major economies is proof positive that psychology has a huge impact on the economy, especially in the short run. Do we REALLY want to inject this kind of nonsense into the equation, when we want and need to borrow a LOT of money from the global community while we supposedly get our act together? This would clearly detract from the confidence of lenders, as it sends a very bad signal.

As stupid as it is, having the discussions and brinksmanship at the debt ceiling is at least a mechanism to FORCE free spending congresspeople on both sides of the aisle to openly defend their free spending ways, and tell their lenders how they intend to pay the new debts we're going to incur. Whatever your political stripe -- if you believe in property values and that we have a duty to repay the debt, I don't see how that disclosure can be a bad thing.

Minting "magic" coins and saying "just trust me" is a game for kids. We need serious adults in the room.

[TheAntiDoomer]

Honestly I don't think you guys believe anything you wrote. I think you guys just see this as another way you might get your doom on (which would be pretty doomy probably if we don't extend the ceiling). But that won't happen, I am farily certain Obama will use the coin or 14th amendment if he has too.

Be Ready To Mint That Coin
http://krugman.blogs.nytimes.com/2013/0 ... that-coin/

Enter the platinum coin. There’s a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector’s items — but that’s not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling — while doing no economic harm at all.

So why not?

It’s easy to make sententious remarks to the effect that we shouldn’t look for gimmicks, we should sit down like serious people and deal with our problems realistically. That may sound reasonable — if you’ve been living in a cave for the past four years.Given the realities of our political situation, and in particular the mixture of ruthlessness and craziness that now characterizes House Republicans, it’s just ridiculous — far more ridiculous than the notion of the coin.

[radon]

But that won't happen, I am farily certain Obama will use the coin or 14th amendment if he has too.

Russia currently holds around USD 150 billion in Treasuries. Once the Russian Finance Ministry hear about this new coin, they'll probably run in panic to the US Treasury trying to redeem the holding. The Treasury man will then show them the coin and say "Just bring me the change and this one is yours." The Russians will then mumble "Oh, no, not that... may be you want to borrow some another 100billion from us instead?" Reluctantly, the Treasury man will agree.. and armed with his powerful coin, will go around the world raising money for living, just as Mark Twain's J1m banknote holder did a while ago.

No limits to human ingenuity.

[Tanada]

There are however limits to how much stupidity other Governments will put up with to keep the US Dollar afloat as the world reserve currency. One step in this direction and it will be over and done with.

[bluesman]

The only way this makes any sense, is if the coin weighs 26,726.5 tons!

[Plantagenet]

Why just mint one?

King Obama should mint 50 of the trillion dollar coins. Then he
Could use them to pay off the US federal debt, bail out social security
And Medicare, cut the payroll tax on working folks that he
Just raised AND run the government for the next 4 years without even having to ever
Talk again to the evil Rs

Ps sorry for typos. I'm traveling in Portugal ----posting from iPhone

CHEERS!

[vaseline2008]

Adding more dollars to the system would create more inflation, no? So in the end would it just zero sum out?

[Revi]

Why is it any more ridiculous to sell the Fed a trillion dollar coin than to ask them to buy billions a day in our own debt?

[dinopello]

C.R.E.A.M.
Get the money
Dollar, dollar bill y'all

I think the trillion dollar platinum coin is a perfectly ridiculous response to the equally ridiculous situation that congress has to agree to raise the debt limit in order to pay the obligations that they incurred after they already agreed to spend and spent the money.

[EdwinSm]

I think the trillion dollar platinum coin is a perfectly ridiculous response to the equally ridiculous situation that congress has to agree to raise the debt limit in order to pay the obligations that they incurred after they already agreed to spend and spent the money.

+1

I don't know about all the legal points of this, but it does seem to me that the US has got itself into a ridiculous political stalemate situation and the silly coin idea is a clever way to point this out.

[Tanada]

I think the trillion dollar platinum coin is a perfectly ridiculous response to the equally ridiculous situation that congress has to agree to raise the debt limit in order to pay the obligations that they incurred after they already agreed to spend and spent the money.

+1

I don't know about all the legal points of this, but it does seem to me that the US has got itself into a ridiculous political stalemate situation and the silly coin idea is a clever way to point this out.

Anything used to point out the silliness or outright stupidity of politicians in an attempt to slow down or halt their silly or stupid actions is always a plus. My fear is politicians taking this idea seriously and destroying confidence in the Dollar, at which point the collapse of our monetary system becomes inevitable.

[Econ101]

sure its rediculous but the Fed does the trillion dollar coin all the time with worthless bonds deposited at fed reserve banks and used as reserves allowing the banks to distribute these funds as money and loans. Its called monitizing debt. Besides a trillion wont even pay this years bill for means tested welfare support payments because that is well over a trillion/year now. A trillion dollar coin is chump change when put up against the insane spending of thes government.

The only thing that pays our bills is productive economic activity, control and shrink federal spending and reduce taxes. Our government should be ashamed that so much of its human resources is going to waste. The idea we are paying so much out in welfare is an admission of failure.

[Plantagenet]

ridiculous situation that congress has to agree to raise the debt limit in order to pay the obligations that they incurred after they already agreed to spend and spent the money.

You don't understand what the debt limit is

The money has not already been spent----no spending occurs above the debt limit until Convress authorizes it-----that's the whole point of the debt limit
I know you're just repeating the lie that Obama told to spin the issue but I thought you were smart enough not to be fooled on something this straightforward

[dinopello]

You don't understand what the debt limit is

You don't understand what obligations are. And, maybe you don't understand how our government works here in the US. The congress has the power to pass spending bills and they originate in the House. So, if the Republican-controlled house doesn't want to spend any more money in the future, they can just not authorize the spending.

[Plantagenet]

You don't understand what spending is. Future obligations are encumbrances----not spending.

[lowem]

Trillion dollar coin? That's just a test case. A trial balloon, so to speak.

Soon the question will be, why stop at a trillion?

10^12 : Trillion
10^15 : Quadrillion
10^18 : Quintillion
10^21 : Sextillion
10^24 : Septillion
10^27 : Octillion
...