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Can a $1 Trillion Coin End Debt Ceiling Crisis?
Yahoo Finance ^ | 01/04/2013 | Charles Riley

Posted on 01/04/2013 12:51:00 PM PST by SeekAndFind

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."

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: coin; debtceiling

1 posted on 01/04/2013 12:51:04 PM PST by SeekAndFind
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To: SeekAndFind

Can Uncle Joe throw a football over that mountain?


2 posted on 01/04/2013 12:55:16 PM PST by TurboZamboni (Looting the future to bribe the present)
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To: SeekAndFind

With a trillion-dollar coin in your pocket, you could drink for free the rest of your life*. “Sorry, all I’ve got is this trillion-dollar coin. Can you break a trillion?”

*Or until Zimbabwe-style inflation takes hold.


3 posted on 01/04/2013 12:59:06 PM PST by USFRIENDINVICTORIA
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To: SeekAndFind
These are just as good. These are IOUs.

Lloyd, "Dumb and Dumber"
4 posted on 01/04/2013 1:12:26 PM PST by Tzimisce (The American Revolution began when the British attempted to disarm the Colonists.)
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To: SeekAndFind

at current prices of 1550/oz. the coin would weigh 322 tons.

Problem is there is no where near that amount in the entire world.


5 posted on 01/04/2013 1:13:43 PM PST by buffaloguy
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To: SeekAndFind

How about a Powerball Jackpot worth $1,000,000,000,000? Sell 2,000 tickets for a billion bucks a ticket. Makes as much sense.


6 posted on 01/04/2013 1:19:36 PM PST by Huskrrrr
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To: buffaloguy

It’s a coin made of platinum with the words “one trillion dollars” on it. Not a coin made from $1 million worth of platinum.


7 posted on 01/04/2013 1:20:34 PM PST by SoothingDave
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To: SeekAndFind
They just need to print one of these in US Currency. Problem Solved!


8 posted on 01/04/2013 1:23:21 PM PST by Disambiguator
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To: SoothingDave

Precisely. A $1 Sacajawea coin has nowhere near a dollar’s worth of copper and nickel in it.


9 posted on 01/04/2013 1:24:32 PM PST by Buckeye McFrog
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To: SoothingDave

It’s a coin made of platinum with the words “one trillion dollars” on it. Not a coin made from $1 million worth of platinum.

Then why not mint a one million dollar coin out of copper?

It would be cheaper...


10 posted on 01/04/2013 1:27:10 PM PST by GraceG
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To: SeekAndFind

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.


So in other words, someone in Treasury is “reducing” spending by 200 billion?

“Fire up the ovens, boys, we got some cookin’ to do!!”


11 posted on 01/04/2013 1:27:59 PM PST by freedomlover
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To: SeekAndFind

They fact some people are seriously contemplating this “option” scares the living crap outta me...


12 posted on 01/04/2013 1:29:10 PM PST by GraceG
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To: SeekAndFind
Why not invent a coin with a built in counter that changed the number for the value of the coin automatically. It could start out a a 2 cent coin and a few years obama would make it worth $1Billion. A loaf of bread could cost lets say $400Billlion and a drink of water to wash it down might cost $100M.
13 posted on 01/04/2013 1:31:57 PM PST by mountainlion (Live well for those that did not make it back.)
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To: freedomlover

Excuse me, but what is the difference between a one trillion dollar coin and a trillion one dollar bills?

debt is debt.


14 posted on 01/04/2013 1:32:47 PM PST by CoastWatcher
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To: SeekAndFind

Only if it's the size of a Yap coin......................

15 posted on 01/04/2013 1:34:18 PM PST by Red Badger (Lincoln freed the slaves. Obama just got them ALL back......................)
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To: Disambiguator

Exactly! Geeze... just make it a bazillion dollar coin and do away with taxes for eternity. I mean, we’ll all be trillionaires!

Glad we had a chance to point this out. What a bunch of dummies.


16 posted on 01/04/2013 1:35:10 PM PST by Lee'sGhost (Johnny Rico picked the wrong girl!)
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To: SeekAndFind
What kind of ludicrous, pie-in-the-sky third world voodoo does it take to believe that inventing a gazillion dollar coin that does not even remotely come close to containing that much platinum is going to do anything at all?

Seriously, what is declaring this thing as being worth this or that supposed to do? Are we going to borrow against pretend equity to create pretend money now?

What?

17 posted on 01/04/2013 1:40:55 PM PST by RegulatorCountry
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To: SeekAndFind

How many $ Trillions have we already ‘minted’ through QE and other means?

What the author suggests in jest is our current fiscal policy.


18 posted on 01/04/2013 1:47:32 PM PST by LucianOfSamasota (Tanstaafl - its not just for breakfast anymore...)
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To: Disambiguator
I have five of those Zimbabwe bills in mint condition in my drawer. I bought them on Ebay for about six dollars, which was many times more than they are actually worth, but I splurged.

I also bought Saddam money on Ebay.

19 posted on 01/04/2013 1:55:19 PM PST by dead (I've got my eye out for Mullah Omar.)
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To: SeekAndFind
I wonder how much Obama is going to get knocked off the National dept by selling off California to the ChiComms.
20 posted on 01/04/2013 2:04:08 PM PST by Falcon4.0
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To: GraceG

Is this in any way similar to the EO on currency that JFK issued? The one that some think may have led to his assassination?


21 posted on 01/04/2013 2:30:22 PM PST by Buckeye McFrog
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To: CoastWatcher

The original concept for this idea allegedly came from someone at the American Enterprise Institute. Not exactly a raving left-wing loon factory.

Then again the Obamacare mandate had its origins in a white paper put out by the Heritage Foundation.

God save us from people who think they’re smarter than the rest of us sitting around Washington, D.C. brainstorming all day.


22 posted on 01/04/2013 2:32:41 PM PST by Buckeye McFrog
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To: Falcon4.0

but at least the Chinese will have cheap lettuce!


23 posted on 01/04/2013 2:58:40 PM PST by TurboZamboni (Looting the future to bribe the present)
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To: All
I have a theory and a question.

Theory: All money is nothing more than an IOU. Money is a unit of transfer. It transfers the value of goods or services. Money let's you transfer the value of a good or service to another use, good or service.

Fact: Our government is empowered to print money.

Would it be possible for the Government to pay for itself, WITHOUT taking taxes from the governed?

No taxes, except maybe small, "use taxes".

Theory: With US FED print of money to pay it's bills, there would be no appreciable inflation hit, because our trillion dollar economy would generate a more robust GDP. 6 or 7% growth per year or more!

No taxes and print money

24 posted on 01/04/2013 3:27:24 PM PST by agincourt1415 (Tired of the current State, and Federal Tax System go here: APTTAX.com)
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To: agincourt1415

Heck, make a couple hundred of these coins and declare them worth eleventy quintillion. No taxes, free houses, free food, free gold plated Obamaphones for all.


25 posted on 01/04/2013 3:47:46 PM PST by RegulatorCountry
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To: SeekAndFind

This is exactly what the Germans did after World War I, in an effort to get rid of their debt. The subsequent inflation ruined the country’s economy.


26 posted on 01/04/2013 4:04:04 PM PST by popdonnelly
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To: GraceG

Present law allows the Treasury Secretary to mint coins out of platinum and assign a value to them. He can’t do that with copper or any other metal.


27 posted on 01/04/2013 4:21:07 PM PST by SoothingDave
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To: RegulatorCountry
To the contrary: No government welfare needed if we are tax free. The economy roars.

Or just a minimal tax like 3% of income with no deductions.

We suffer from Stockholm syndrome on taxes.

28 posted on 01/04/2013 9:57:02 PM PST by agincourt1415 (Tired of the current State, and Federal Tax System go here: APTTAX.com)
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