January 11, 2013

Short cut economy

If you had to flip a coin over whether the US Congress will raise the country's debt ceiling, here's the ultimate one - a freshly minted trillion-dollar platinum coin.

A formal petition has been started asking the White House to create such a coin in order to avoid another high-stakes fiscal battle to raise the debt ceiling.

The Treasury secretary has the authority to mint platinum coins in the denomination of his choosing. Meant for commemorative products, US law grants Treasury permission to "mint and issue platinum bullion coins and proof platinum coins", which would allow the Treasury to get around legal limits on printing money to pay the bills.

Depositing it would technically pay down US debt, buying time before the country reached the limit on it (the "debt ceiling") again.

It's an idea that's been discussed favourably (albeit cautiously) by everyone from Democrat Representative Jerry Nadler to economist Paul Krugman, who calls it a gimmick but says "there’s a pretty good case for using whatever gimmicks come to hand".
Because if it's economics - or the share market - it's all about gimmicks.

Can we pay our politicians here the say way (although in smaller denominations)?  At least until the bunch of them start acting like leaders, not a collective of douche-bags.  

US 1 trillion dollar coin debt solution gains currency

2 comments:

  1. Anonymous7:53 AM

    At today's prices a trillion dollar platinum coin would weigh around 642 million ounces, or circa 18,000 tonnes.

    I've read, this is actually around 1,100 times more platinum than has ever been mined - 16 tons only in fact (about 25 cubic meters).

    It follows, for a trillion dollar coin platinum would have to be priced at 1,100 times the current price - this would mean the value of the dollar would reduce by 1,100 times.


    j

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  2. I was thinking they didn't need to use platinum to the value, much like a $100 sure as shite doesn't contain $100 dollars worth of paper/plastic/technology/ink.

    You know: a little coin, with a trillion dollars stamped on it.

    The government can place any value they like on any money media.

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