Trillion-dollar platinum coin could be minted at the last minute - Axios
A trillion-dollar platinum coin could be minted "within hours of the Treasury Secretary's decision to do so," Philip Diehl, former director of the United States Mint, tells Axios.
Why it matters: Congressional solutions to the debt-ceiling problem could take weeks to implement, especially if the reconciliation process is used — and time is running out. In case of emergency, a trillion-dollar coin could be deployed to bridge any gap between the money running out and the debt ceiling being raised.
How it works: The U.S. Mint, which Diehl ran from 1994 to 2000, already produces a one-ounce Platinum Eagle and has no shortage of platinum blanks already in stock.
Producing a trillion-dollar Eagle would require only the denomination to be changed. "This could be quickly executed on the existing plaster mold of the Platinum Eagle," says Diehl. Then an automated process would transfer the new design to a plastic resin mold.
Even if Janet Yellen, the Treasury secretary, has no intention of minting such a coin, there is no reason for her not to quietly instruct the Mint director to take those steps a day or two in advance.
At that point, a coin could be struck in minutes at the West Point mint. Even if it then needed to be physically deposited at the New York Fed, that's only a short helicopter ride away.
"Voila, we'd have bought ourselves the equivalent of a trillion-dollar increase in the debt limit, without any impact on inflation," says Diehl.
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Also even if it does go in circulation the US still has way more leeway when it comes to printing money than most countries because everybody wants the US dollar, most of the world's trade is still conducted with the dollar. Why do you think they care so much about propping up the petrodollar?
It's erasing debt, so no. Money means something entirely different once you leave the world of wages.
Because the money is already spent. We're just updating the balance sheets.
That's the whole joke of "Debt Ceiling". Its all just an accounting gimmick that we pretend to care about every arbitrary time intervals. The Treasury sells bonds at near-zero interest to the banks, who have an endless appetite for new borrowers. The banks get money at below-bond-rate from the Fed, collecting a vig on the balance for doing nothing. The Fed puts a new claim on the assets of the banks which are... US Treasury Notes.
Trillion Dollar Coin short-circuits the whole process and denies Fed-affiliated banks from collecting 0.25% interest on a trillion dollars. But the end result is the same. The inflationary impact comes from Federal Spending, not from Federal Borrowing. The Borrowing is just an accounting process to expand the volume of currency that we already planned to spend.
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Becuase the economy is fake. Technically everyone is just agreeing it won't. Which is good enough
Money being printed doesn't contribute to inflation, circulating it does. The fed could, if they were feeling really silly, say "the federal reserve now holds a quadrillion dollars in reserve", have the treasury print a giant stack of symbolic trillion-dollar coins, and as long as they don't do anything with it, it's just a number on a balance sheet.
It's basically a made-up procedural response to a made-up procedural problem (the coin and debt ceiling, respectively). Now, if some dolt four or five terms down the line starts disbursing that cash to fund programs or cover costs instead of collecting taxes, which would allow the gov't to recirculate the already-existing money supply, then the money will enter the economy proper and inflation will start happening, proportionally to however much cash is injected.
because the money is not invested or spent, it doesn't do anything. it just raises the number on the US budget.
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