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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Money is worth exactly what people believe it is. This is why Bitcoin is worth anything despite crypto clearly being full of scams based on nothing: belief. In the case of the US dollar, it’s the reserve currency of the world, which means there are many commodities that can only be purchased by holding US dollars. So the key players here are the world bank and the banks of foreign governments. Making a trillion dollars to spend, as much as it is, doesn’t put a huge hole in the money supply proportionately. Paying off all our debt at once, however, would like spook our allies and lead to petrodollar alternatives surfacing. In other words, it’s a matter of diplomacy, not economics. Paying off all our debt at once would be like your roommate walking up to you holding a suitcase and angrily handing you every dollar they’ve ever borrowed from you and asking “are we even?” That shit’s concerning whether they owe you the money or not and it does not imply that they will be involved with you much longer. Countries trading with each other and owing each other things is the oldest way in the book to prevent war. The newest way to prevent war, of course, is to be a nuclear power and spend enough on the military to fight your two biggest rivals at once.
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