1,000,000,000,000 Platinum coin..
jayPem
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https://www.businessinsider.com/debt-ceiling-solution-mint-a-trillion-dollar-platinum-coin-2023-5
If these are ever minted, could one wind up in a extreme deep pocket collection one day?
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Old news, but someone saw fit to resurrect it again in a business publication.
Not to worry, though. If/when all if this happens, before long we'll all have wallets and pockets stuffed with trillions of dollars.
Just ask the Germans in 1922/23, the Zimbabweans in the early 2000s, the Yugoslavians in the 1990s, etc.
I actually got a head start with DCarr's version several years ago.
Definitely old and "fake" news and a thread topic that might be easily imagined to devolve quite quickly.
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Huh, old news to you guys, first I ever heard of it.
Since I find politics about as interesting as stamp collecting (no interest) I forget sometimes how the internet is.. my bad, I'll delete if necessary.
I guess I took this fake news literally and was simply wondering if far into the future collectors would ever wind up with such coins as these... if they were made that is?
Would love to see the Dan Carr offering if anyone has one...
The original point of the story is interesting - that the platinum coin legislation is the only one that allows the Secretary of the Treasury to set the coin's denomination, thereby theoretically opening the door to this scheme.
It's not really "fake news". It's a proposal that someone floated about 10 or 12 years ago. It gets resurrected every time there's a debt ceiling negotiation. It's never come close to happening.
Yeah... Let's just send China and other countries a few of those and say ok, we're square now...
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I have a related question: Is our everyday coinage backed by debt? Do bonds need to be issued to back the coins struck by the Mint?
I believe that certain forms of paper money issued in the past (United States Notes) were not backed by debt.
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It has not been given serious consideration by Gov officials .....yet.
And milk will be a million dollars a gallon.
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We will know it is real when someone here finds one in a Coinstar machine.
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I wonder if it will fit in a Corvette
Exactly. In the last number of years ,the story seems to make the rounds regularly at this time of year.
I would be interested in the trillion dollar coin but I only buy coins relatively close to melt.
Sell all your platinum now while it's worth something.
Paper money eventually returns to its intrinsic value. Zero. Voltaire. Ebay coinbowlllc
Definitely "fake". Everyone knows coins for commerce are clad now
More like gossip then.
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@Overdate asked “Is our everyday coinage backed by debt? Do bonds need to be issued to back the coins struck by the Mint?”
No, any profit gained by issuing coins goes straight to the Treasury. No debt is involved.
Federal reserve notes are shown as a liability on the Fed balance sheet, but this is simply an accounting norm (ie, in substance we profit by issuing money)
Maybe the government could resume issuing unbacked currency such as U.S. Notes. It would still be inflationary, but at least it wouldn't add to a debt to be passed down to future generations.
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I don’t think I would call it gossip either since Yellen even addressed (and dismissed the idea) a few months back.
Maybe this would get more legitimacy if they agreed to send it in to be slabbed
Followed by a quick demonetization.
Yep... comes up whenever they address changing the debt ceiling. Cheers, RickO
Why don't they aim bigger and go with a 5 trillion palladium coin.
Paper money eventually returns to its intrinsic value. Zero. Voltaire. Ebay coinbowlllc
They wouldn't want to appear greedy.
As I understand it, and I could be very wrong, the coin wouldn't be profit because the coin wouldn't be sold. The coin would be use by the Fed government to pay off debt held by the federal reserve. By law, the FR has to accept the coin as payment. It would be a big F-U to the FR because the FR would be stuck with these coins that they realistically couldn't use or spend because no one would accept them or be able to provide change. While I'm not sure how that would bode for the future of the FR, the US Government could just go back to issuing its own money and be just fine.
In a few years they'll be making these in copper plated zinc by the billions.
And the old platinum ones will sell for melt unless it's a better date. The largest denomination paper will be a 10 quadrillion dollar note which will buy a week's worth of groceries and you can pay off the mortgage for New York with the change.
They can make a 5 trillion platinum coin. They cannot make a 5 trillion palladium coin.
Why is that? Doesn't congress have the full authority over coining money in Article 1 Section 8 Clause 5? I don't believe there is a restriction on what it's comprised of. I could certainly be wrong.
From the article:
"The government could run out of money to pay its debts as soon as June 1, "
Hey, sounds just like my bank account BECAUSE of the darn high prices of everything.....................
"When they can't find anything wrong with you, they create it!"
This story is so old it dates to when platinum was worth more than gold.
This thread????
"When they can't find anything wrong with you, they create it!"
They cannot make a 5 trillion palladium coin.
Why not also - they make 2 -1/2 cent CENTS, and 11 cent nickels - so why not???
"When they can't find anything wrong with you, they create it!"
Congress could authorize anything, but it already did pass legislation allowing the Secretary of the Treasury to set the denominations of platinum coins.
They were not planning for the trillion dollar coin situation, but the legislation happened to have been written in such a way that it would be theoretically possible.
Yes, a loophole in the law allows the US Treasury to set the denomination for Platinum Eagle coinage. A trillion-dollar platinum coin could be issued by the US Treasury. It would NOT have to have a trillion dollars worth of platinum in it. It could, for example, contain $1,000 worth of platinum while having a denomination of one trillion dollars.
So what would the US Treasury do with it ? They couldn't easily spend it, of course. But they could deposit it at the Federal Reserve Bank. Then the Treasury would have a trillion dollars to spend on expenses while not increasing the debt levels above the debt limit.
This idea seems to pop up as a threat whenever there is resistance to raising the debt ceiling. It was first proposed in 2013. I made a "Hard Times Token" of it at that time:
Cool coin!
I think a better use is to repay debt. Unless that's what you meant by "deposit?" The FRB would struggle to spend it, but they could carry it on their balance sheet as an illiquid asset. And the US would reduce its debt and eliminate some interest burden. And why 1T? Might as well make it for $31.7T and pay it all off.
That is, if I understand everything correctly.
The US Treasury issues bonds and sells them to the Federal Reserve all the time. Basically, in this arrangement, the government is borrowing money from the Federal Reserve, which is creating money out of thin air to pay for it. But when there is a legal debt ceiling in place, there is a limit to how many bonds the government can issue (a limit to how much it can borrow). But a trillion dollar coin does not incur any new debt, so the government could obtain a trillion dollars of spending money without borrowing anything.
Now if the US Treasury were to issue a 32 trillion dollar coin to pay off the entire national debt, that could legally be done right now. But the net effect would be that it would dilute the value of the US Dollar by half.
I think your math is off a bit because I don't think the total money supply is the same size of the US national debt, or is it? Doesn't really matter, but if true, while money supply doubles thus theoretically devaluing everything by half, if that 32T coin is illiquid and can't be spent, it's not inflationary. As I recall from my economics class, it's not just about the money supply, but also about money velocity. So you can double the money but if only half of the total supply is moving through the economy, the effect is cancelled out. Right?
Once all of the 32 trillion was spent, the amount of dollars sloshing around the world economy would be more than twice the amount that it was before. So then the value of the dollar would likely be around half of what it was.
RIght, But how would the bank be able to spend it? No one would accept it as payment for anything. It would be like trying to use a $1000 bill at a convenience store (if they existed). That's why it would be an illiquid asset. Maybe the bank could borrow against it. Otherwise I'm just not sure it's actually spendable.
Congress will never approve a multi trillion dollar coin outright. The statutory authority advocates of the trillion dollar coin are citing allows the striking of bullion platinum coins in a denomination to be selected by the Secretary of Treasury.
This is where my question is. So the U.S. Mint mints a $1 Trillion platinum coin.... which is an 'asset'. Whose balance sheet does it show up on? And how does that now transfer into usable money to pay government bills, etc. ?
But those in charge... are magicians that can make just about anything happen i guess.
It goes in the U.S. Treasury general account. The $1 trillion dollar credit is then used to pay bills and the nominal amount of debt stays below the statutory limit. The Federal Reserve, no doubt, would have to print more fiat currency as a result. Basically the bullion coin statute gives the Secretary of Treasury broad power to make money without any real limits. As usual, Congress passes another horribly worded statute ripe for abuse.
As for what the Fed would or could do with such a coin if it accepted it is unknown. Likely the Mint/Treasury Department would try to buy it back at face value at some point which would probably require an act of Congress to fund, fix the loophole, and properly raise the debt ceiling.
My understanding is that the coin would show up as an asset on the Federal Reserve's balance sheet. On the government's side, it would show up as seigniorage, just as our current newly minted coins do. The transfer into usable money could be accomplished by the government "paying off" one trillion dollars of Fed-owned debt via deposit of the trillion-dollar coin (reducing the national debt by a trillion dollars), then re-borrowing the trillion dollars from the Fed over time until the debt limit is reached once more. I'm not sure the above is accurate, just my theory on how the transaction might flow.
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@Overdate -- I think you've summarized it well.
I believe the FR would have to accept it. US currency must be accepted for payment of debts:
The problem is, the Fed would no longer lend the US any money after that - it would (or should) destroy that relationship. This is probably the reason why most politicians or Yellen will say that this is not an option (to protect the FRB). Personally, I think that's OK because it is my belief that the government should get back in the business of issuing its own money instead of using a private bank to do so, but that's a conversation for another time.
Maybe. In any case Congress would go ballistic. It would also not accept the premise that the debt ceiling is unconstitutional. They would crap little green nickels, which I guess they could melt down and sell for whatever the current nickel price. Help solve the debt, do something constructive for a change.
It would have to be part of a larger movement back to a debt money system (vs fractional reserve). It would take someone with real leadership and courage to do it, and I'm not sure that exists.
The US Treasury deposits a trillion dollar coin with the Federal Reserve Bank. Now the US Government has a trillion dollars to spend. They can spend that just like they always do, here and there for things like entitlements, defense, etc.
Alternatively, the U.S. could once again begin issuing unbacked United States Notes to circulate alongside the current Federal Reserve Notes. This would not increase the national debt.
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That's what I was suggesting. It would be a big snub to the FRB though.