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Old 01-04-2013, 02:29 PM   #1
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Default $1 Trillion platinum coin?

Sorry, maybe I don't get it, but isn't this the same (or on par) as kiting a check, just on a grander scale? Funny thing is Congress is whining about the debt, but who was it that authorized the spending here???


Can a $1 trillion coin end debt ceiling crisis?

What if the threat of a voluntary default by the United States could be erased by simply turning one tiny scrap of platinum into a coin?
That's right. No debt ceiling problem. No bickering in Congress. No market jitters. The only thing needed is for the Treasury Department to mint a platinum coin with a face value of $1 trillion.
Of course, this is not going to happen. Creating money out of thin air is hardly a solution. It could lead to even more concerns from those worried about inflation. Critics of the Federal Reserve's monetary easing programs would likely be apoplectic if the Treasury Department trumped Ben Bernanke's "helicopter drop" by minting a trillion more new dollars.
The influential New York Times columnist Paul Krugman has already dubbed the talk a "gimmick." But here is why some people think this bizarre strategy could work.
Last week, Treasury Secretary Tim Geithner made it official: Federal borrowing has reached the $16.394 trillion debt ceiling.
Treasury, which runs the government's debt-issuance operation, is busy creating about $200 billion of headroom by employing what it calls "extraordinary measures." That should cover about two months' worth of borrowing.
When the two months expire, Treasury will no longer be able to pay the country's bills -- that is, it won't be able to borrow more money to pay for spending already authorized by Congress.
If Congress does not act to raise the debt ceiling, the U.S. will default on its debts. Not good. But this is where the platinum coin comes in. Normally, the Federal Reserve is charged with issuing currency. But U.S. law, specifically 31 USC 5112, also grants Treasury permission to "mint and issue platinum bullion coins and proof platinum coins."
This section of law was meant to allow for the printing of commemorative coins and the like. But the Treasury Secretary has the authority to mint these coins in any denomination he or she sees fit.
With a $1 trillion coin in hand, Treasury could deposit the money into Fed accounts, and pay its debts in that manner, instead of relying on bond issuance.
And none of this requires Congressional consent. Talk about an elegant solution.
The White House unsurprisingly hasn't commented on the idea. But Rep. Jerrold Nadler is on board. "I'm being absolutely serious," he told Capital NY. "It sounds silly but it's absolutely legal."
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Old 01-04-2013, 02:37 PM   #2
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And would massively destabilize the market, ramp inflation incredibly and violate the Constitution
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Old 01-04-2013, 02:45 PM   #3
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They could mint 16 of those coins and probably spend 85% of it on things other than the debt.
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Old 01-04-2013, 03:02 PM   #4
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You can't just produce "money" out of thin air........
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Old 01-04-2013, 03:08 PM   #5
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Nice. ^^^^^^.
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Old 01-04-2013, 06:05 PM   #6
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Originally Posted by jw33 View Post
You can't just produce "money" out of thin air.......
The sad part is most dumbascraps won't understand the idiot-in-charge can't just do this and fix it. They really are that stupid.
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Old 01-04-2013, 06:10 PM   #7
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Originally Posted by 4.6coupe View Post
Nice. ^^^^^^.
It was good...
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Old 01-05-2013, 10:29 PM   #8
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Originally Posted by jw33 View Post
You can't just produce "money" out of thin air...
The federal reserve does this exactly.

They lend money they created out of thin air, and charge interest on it. Ever
Heard of fiat money?
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Old 01-05-2013, 10:40 PM   #9
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Originally Posted by davbrucas View Post
I want to like Slow99 since people I know say he's a good guy, but just about everything he posts is condescending and passive aggressive.

Most people I talk to have nothing but good things to say about you, but you sure come across as a condescending prick. Do you have an inferiority complex you've attempted to overcome through overachievement? Or were you fondled as a child?

You and slow99 should date. You both have passive aggressiveness down pat.
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