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Thread: WTFudge is this "trillion dollar platinum coin" nonsense?

  1. #1

    Default WTFudge is this "trillion dollar platinum coin" nonsense?

    http://www.businessinsider.com/sudde...economy-2013-1

    This is really thrilling.

    An arcane idea that started on finance blogs in the summer of 2011-- that Tim Geithner should mint a trillion dollar platinum coin to avert the debt ceiling -- is now seriously taking off.

    The premise of the idea is this: Although the Treasury can't just create money out of thin air to pay its bills, there is a technicality in the law that says the Treasury has special discretion to create platinum coins, and the thinking is that Tim Geithner could make the coin and walk it over to the Federal Reserve and deposit it in the Fed's account.

    The first blog to really promote the idea was Cullen Roche's Pragmatic Capitalist. We jumped on it soon thereafter, as did others. Of course, once the debt ceiling was solved, people forgot about it.

    But there's a new debt ceiling looming, and this time, LOTS more people are talking about it.
    We noted our surprise back in early December that an actual 3rd party research firm brought up the idea.
    Now it's going even more viral.

    Paul Krugman discussed it yesterday.

    In an interview with Capitol New York, Representative Jerry Nadler came out in favor of the solution (Nadler has an above-average understanding of economics in our experience).

    Josh Barro at Bloomberg is now endorsing it, and that's spread a huge conversation about it among DC journalists and policy folks on twitter.
    Barro explains why it's the perfect "solution" to the debt ceiling fiasco:

    Hitting the debt ceiling isn't an option. It's no way to run the country, and Republicans know that. So, a debt-ceiling increase shouldn't count as a "concession," and it's nutty for Obama to have to give substantive policy ground to get one.

    Monetizing deficits through direct presidential control of the currency, in lieu of borrowing, is also no way to run a country. It's silly, and it's perfectly legal. Agreeing not to do so is therefore the ideal "concession" for Obama to offer in return for Republicans agreeing to end the threat of a debt-default crisis.

    This is basically the right way to think about it. Yes it's silly to think of funding yourself with a coin, but it's even sillier to think that defaulting might be a good idea, so you might as well do it.

    One economics point must be addressed: Lots of people, when they hear the idea, say one of two things:
    This would cause massive inflation!

    Well if we did this, why not a $100 trillion dollar coin?
    Neither of these are legitimate rejoinders.

    This would not result in massive inflation, because we wouldn't have a gigantic injection of new money into "the system." That is only achievable through massive spending beyond which the economy can handle. But this loophole would in no way let the government spend beyond which Congress has allocated through the budget.

    And the point about the $100 trillion coin misses the point as well. The current economic constraint is not what we can raise or spend, but rather a dumb law (the debt ceiling) that we would like to get around legally. A $1 trillion coin accomplishes this goal just as easily as a $100 trillion coin does. Remember, the constraint isn't money, the constraint is law.

    So yes, this is very thrilling, and we hope Obama puts an end to this nonsense tomorrow by unveiling the coin.


    Read more: http://www.businessinsider.com/sudde...#ixzz2GxyZj0Gf
    Last edited by Patrick Henry; 01-03-2013 at 06:42 PM.
    "I am commonly opposed to those who modestly assume the rank of champions of liberty, and make a very patriotic noise about the people. It is the stale artifice which has duped the world a thousand times, and yet, though detected, it is still successful."

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  3. #2

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    Sorry wrong forum
    "I am commonly opposed to those who modestly assume the rank of champions of liberty, and make a very patriotic noise about the people. It is the stale artifice which has duped the world a thousand times, and yet, though detected, it is still successful."

    --Fisher Ames (1789)

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    Member John F Kennedy III's Avatar
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    I'm no economic expert. But I don't think it's that simple. Wouldn't the coin have to be WORTH $1 Trillion in platinum? Otherwise it seems it would be the same as the Fed printing all that counterfeit it is so fond of.

    Does the government even have a trillion dollars worth of platinum?
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    Quote Originally Posted by John F Kennedy III View Post
    I'm no economic expert. But I don't think it's that simple. Wouldn't the coin have to be WORTH $1 Trillion in platinum? Otherwise it seems it would be the same as the Fed printing all that counterfeit it is so fond of.

    Does the government even have a trillion dollars worth of platinum?
    The premise of the idea is this: Although the Treasury can't just create money out of thin air to pay its bills, there is a technicality in the law that says the Treasury has special discretion to create platinum coins, and the thinking is that Tim Geithner could make the coin and walk it over to the Federal Reserve and deposit it in the Fed's account.
    The 'technicality' described above supposedly allows Congress to assign an arbitrary value to the coins, but it is specific to platinum coins.

  6. #5
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    Quote Originally Posted by the blithering idiot quoted in the OP
    This would not result in massive inflation, because we wouldn't have a gigantic injection of new money into "the system." That is only achievable through massive spending beyond which the economy can handle. But this loophole would in no way let the government spend beyond which Congress has allocated through the budget.
    Yeah, right - 'coz we all know how Congress would never, *ever* engage in "massive spending" beyond its means.

    A trillion dollars would be plonked down in a Fed account, and Congress would just let it sit there without "allocating" it ... just like they didn't "allocate" any of that Social Security "trust fund" money ... oh, waitaminnit ...

    So: this is it, then. This is the wit's end of the desperation to find a way - *any* way, no matter how droolingly moronic - to keep the spend-and-consume economy-thrasher running at maximum RPMs.

    Quote Originally Posted by the blithering idiot quoted in the OP
    And the point about the $100 trillion coin misses the point as well. The current economic constraint is not what we can raise or spend, but rather a dumb law (the debt ceiling) that we would like to get around legally. A $1 trillion coin accomplishes this goal just as easily as a $100 trillion coin does. Remember, the constraint isn't money, the constraint is law.
    Oh, I see! So when I "max out" my credit card and can't buy any more stuff with it, the constraint isn't money. The constraint isn't my inability to pay back what I've borrowed. Oh, no, not at all!

    The constraint is just some silly ol' number (my "credit limit") that some stupid ol' credit issuer came up with out of thin air - just to give me a hard time and stop me from buying stuff I can't pay for!

    Those mean ol' bastards! What the hell do they know? I should just be able to borrow and spend whatever the fuck I want!
    Last edited by Occam's Banana; 01-04-2013 at 03:32 AM.
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    une plume de Libertée GunnyFreedom's Avatar
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    wouldn't that be a 40 million pound coin? Platinum is worth less than gold right now...

  8. #7
    Truth is treason ... Occam's Banana's Avatar
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    And another thing ...

    Quote Originally Posted by the blithering idiot quoted in the OP
    Well if we did this [mint a trillion dollar platinum coin], why not a $100 trillion dollar coin?
    Neither of these are legitimate rejoinders.

    [...] the point about the $100 trillion coin misses the point as well. The current economic constraint is not what we can raise or spend, but rather a dumb law (the debt ceiling) that we would like to get around legally. A $1 trillion coin accomplishes this goal just as easily as a $100 trillion coin does. Remember, the constraint isn't money, the constraint is law.
    IOW: asking why we shouldn't just go ahead and mint a 100 trillion dollar coin instead of a (mere) one trillion dollar coin is NOT to be considered a "legitimate rejoinder" and "misses the point" - because [so the story goes] there would be NO REAL DIFFERENCE between the two for purposes of dodging the debt ceiling.

    So riddle me this: if the blithering idiot who concocted this bullshit really believes what he's talking about, then why doesn't he say, "You want a 100 trillion dollar coin? Hell, no problem! Let's do it! After all, that'll accomplish the goal of dodging the debt ceiling just as easily!" (Hint: it has to do with differences between the two apart from purposes of dodging the debt ceiling.) Understanding why he doesn't say that is key to understanding why the whole notion of conjuring up trillion dollar coins - or 100 trillion dollar coins - is extremely foolish & dangerous. It is also key to realizing that people who spout this nonsense are deluded fools, towering ignoramuses and/or malignant deceivers.
    Last edited by Occam's Banana; 01-04-2013 at 04:48 AM.
    tu ne cede malis, sed contra audentior ito · fiat justitia, ruat caelum · sic semper tyrannis
    The Bastiat Collection - FREE PDF

    Frédéric Bastiat
    • "When law and morality are in contradiction to each other, the citizen finds himself in the cruel alternative of either losing his moral sense, or of losing his respect for the law."
      - The Law (p. 54)
    • "Government is that great fiction, through which everybody endeavors to live at the expense of everybody else."
      - Government (p. 99)
    • "[W]ar is always begun in the interest of the few, and at the expense of the many."
      - Economic Sophisms - Second Series (p. 312)
    • "There are two principles that can never be reconciled - Liberty and Constraint."
      - Harmonies of Political Economy - Book One (p. 447)

  9. #8
    Truth is treason ... Occam's Banana's Avatar
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    Quote Originally Posted by GunnyFreedom View Post
    wouldn't that be a 40 million pound coin? Platinum is worth less than gold right now...
    From the OP article: "there is a technicality in the law that says the Treasury has special discretion to create platinum coins"

    Presumably, this "technicality" (whatever it may be) would allow the minting of a platinum coin with a face value independent of the actual mass of platinum involved.
    tu ne cede malis, sed contra audentior ito · fiat justitia, ruat caelum · sic semper tyrannis
    The Bastiat Collection - FREE PDF

    Frédéric Bastiat
    • "When law and morality are in contradiction to each other, the citizen finds himself in the cruel alternative of either losing his moral sense, or of losing his respect for the law."
      - The Law (p. 54)
    • "Government is that great fiction, through which everybody endeavors to live at the expense of everybody else."
      - Government (p. 99)
    • "[W]ar is always begun in the interest of the few, and at the expense of the many."
      - Economic Sophisms - Second Series (p. 312)
    • "There are two principles that can never be reconciled - Liberty and Constraint."
      - Harmonies of Political Economy - Book One (p. 447)

  10. #9

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    Whats the point?

    Give it to China and balance the books for a few months.

  11. #10

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    Quote Originally Posted by tod evans View Post
    Whats the point?
    Give it to China and balance the books for a few months.
    The only way this happens is if soros, a rothschild or someone similar wants a trillion dollar coin to frame and hang on the wall.
    Quote Originally Posted by Edward Snowden;
    So its, I would say; illustrative that the president would choose to say, "someone should face the music" when he knows the music is a show trial.

  12. #11

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    If they open the door that the platinum coin is worth FACE VALUE vs the value of the precious metal content it may open the door for business owners to pay their employees with gold coins at FACE VALUE vs the value of the precious metal content.
    Insanity should be defined as trusting the government to solve a problem they caused in the first place. Please do not go insane!

  13. #12

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    roflcopter

    There's just everything wrong in that article.
    We have allies many of you are not aware of. Watch the tube. Show this to your 30 and under friends. Listen to it. Even if you don't like rap, it has 2.7 million views.

    http://www.youtube.com/watch?v=kmBnvajSfWU#t=0m16s

    Cut off one min early to avoid war porn.

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    Quote Originally Posted by Occam's Banana View Post
    From the OP article: "there is a technicality in the law that says the Treasury has special discretion to create platinum coins"

    Presumably, this "technicality" (whatever it may be) would allow the minting of a platinum coin with a face value independent of the actual mass of platinum involved.
    I'm glad I'm not the only one that saw the massive logic fail.
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  16. #15

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    Quote Originally Posted by GunnyFreedom View Post
    wouldn't that be a 40 million pound coin? Platinum is worth less than gold right now...
    someone did their math...
    Last edited by SilenceDewgooder; 01-04-2013 at 10:09 AM.

  17. #16

    Default Can Trillion Dollar Coins Save the Economy?

    http://news.yahoo.com/trillion-dolla...-politics.html


    ...While there are laws in place to regulate how much paper, gold, silver or copper currency can be circulated by the government, there is nothing so clearly stated when it comes to platinum. That door open, the Treasury could have the U.S. Mint melt and mold a few trillion dollars of it, then ship the goods over to the Federal Reserve for safekeeping until the time comes to pay the bills....
    These fuckers are just getting blunt. Since "there is a law how much paper, gold, silver or copper currency can be circulated" they are just going to go around it by using another metal. Why not just use bull shit as currency?
    Last edited by psi2941; 01-04-2013 at 10:57 AM.
    Rand Benedict Paul.
    Not only did he sell us out, this douche bag did it to his own father! I'm more upset him selling his father out. I don't care who i think is going to win i would never sell my father out. If his willing to sell his father out what else is for sale?

  18. #17

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    Quote Originally Posted by psi2941 View Post
    Why not just use bull shit as currency?
    Too easy to counterfeit. They want a monopoly on that practice.
    "And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat

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  19. #18

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    So my first guess was that they were going to mint 1 trillion worth platinum coins but actually they plan to mint coins with a denomination of 1 trillion dollars.WHO THE HELL WOULD BE SO BRAIN DEAD TO ACCEPT THOSE COINS AS A PAYMENT.

  20. #19

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    Quote Originally Posted by Demigod View Post
    So my first guess was that they were going to mint 1 trillion worth platinum coins but actually they plan to mint coins with a denomination of 1 trillion dollars.WHO THE HELL WOULD BE SO BRAIN DEAD TO ACCEPT THOSE COINS AS A PAYMENT.
    If it's declared legal tender, with a value declared by Congress? Oh, anyone with an outstanding debt that needed to be paid.

    You have two choices: Accept the legal tender when offered, or accept nothing, and consider your debt paid in full, with no recourse after that.

    There needs to be a Constitutional Amendment that states that Congress isn't allowed to "declare" (regulate) the value of anything at all.

  21. #20

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    Quote Originally Posted by CaptUSA View Post
    Too easy to counterfeit. They want a monopoly on that practice.
    There's actually a limited number of bulls...

  22. #21

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    Quote Originally Posted by Steven Douglas View Post
    If it's declared legal tender, with a value declared by Congress? Oh, anyone with an outstanding debt that needed to be paid.

    You have two choices: Accept the legal tender when offered, or accept nothing, and consider your debt paid in full, with no recourse after that.

    There needs to be a Constitutional Amendment that states that Congress isn't allowed to "declare" (regulate) the value of anything at all.
    That is called bankruptcy .They may think they can do what ever they want with ink and paper but that kind of shit would not pass anywhere.If the USA government does such a thing 3 minutes later the banks will be full of people wanting to change their "american paper" with some other currency.And that means say hello to inflation.

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    Quote Originally Posted by GunnyFreedom View Post
    wouldn't that be a 40 million pound coin? Platinum is worth less than gold right now...
    Sounds like a Triganic Pu / Ningi situation ...

    Quote Originally Posted by The Hitchhiker's Guide to the Galaxy (Entry: the Universe - Subentry: Monetary Units)
    Although there are three major units, (The Altairian Dollar, the Flainian Pobble Bead and the Triganic Pu) none of them count. The Altarian Dollar has recently collapsed (again), the Flainian Pobble Bead is only exchangeble for other Flainian Pobble Beads, and the Triganic Pu has its own very special problems. Its exchange rate of eight Ningis to one Pu is simple enough, but since a Ningi is a triangular rubber coin six thousand eight hundred miles along each side, no one has ever collected enough to own one Pu. Ningis are not negotiable currency, because the Galactibanks refuse to deal in fiddling small change. From this basic premise it is very simple to prove that the Galactibanks are also the product of a deranged imagination.
    Truly, Douglas Adams was a Prophet.
    Last edited by Occam's Banana; 01-04-2013 at 12:11 PM.
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    Frédéric Bastiat
    • "When law and morality are in contradiction to each other, the citizen finds himself in the cruel alternative of either losing his moral sense, or of losing his respect for the law."
      - The Law (p. 54)
    • "Government is that great fiction, through which everybody endeavors to live at the expense of everybody else."
      - Government (p. 99)
    • "[W]ar is always begun in the interest of the few, and at the expense of the many."
      - Economic Sophisms - Second Series (p. 312)
    • "There are two principles that can never be reconciled - Liberty and Constraint."
      - Harmonies of Political Economy - Book One (p. 447)

  24. #23

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    Quote Originally Posted by Occam's Banana View Post
    Sounds like a Triganic Pu situation ...
    +rep for Hitchhikers!

  25. #24

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    I say go for it. Burn this baby down to the ground and start over.

  26. #25
    une plume de Libertée GunnyFreedom's Avatar
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    So, mint a platinum coin the size of a silver dollar, and just arbitrarily assign the value of $1Tn.

    Wouldn't that be exactly the same as QE (just printing money) but from the Treasury instead of the Fed? I suspect that the IMF would have a serious problem with that, and in turn lead to a global dollar selloff thus seriously enhancing the current crisis. A LOT.

    Hmm. Well, if they refuse to let the adults in the room actually fix the problem, this could be one way to provide a teachable moment that creating fake money is destructive, and go ahead and crash the dollar immediately so we can go about solving the problem now instead of just waiting around with our thumbs up our rear until the lunacy of our current course strikes enough voters to make real change.

    I'd rather fix the problem, personally, but this does look like one of the less painful methods of economic self destruction. If economic suicide is the only option that the banksters and partisan establishmentarians are going to let us take, then this would seem to be one of the better forms of economic suicide from among the several options already presented.

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    une plume de Libertée GunnyFreedom's Avatar
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    Quote Originally Posted by John F Kennedy III View Post
    I'm no economic expert. But I don't think it's that simple. Wouldn't the coin have to be WORTH $1 Trillion in platinum? Otherwise it seems it would be the same as the Fed printing all that counterfeit it is so fond of.

    Does the government even have a trillion dollars worth of platinum?
    No, apparently only about half a million pounds of platinum has ever been mined in the history of the world.

    There is approximately 180,000 tons of gold on and in the entire planet Earth when you add mined and unmined together, and scientists guess there there is about 1/10th the amount of platinum on the planet, making roughly 18,000 tons, or around 36 million pounds.

    Since $1Tn worth of platinum is a little over 40.3Mn pounds, and the entire planetary physical supply of platinum, mined and unmined together is around 36.5Mn pounds, I would venture to say it is unlikely there is enough physical platinum on the entire planet earth to mint such a coin.

  28. #27

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    Quote Originally Posted by Demigod View Post
    That is called bankruptcy.
    Incremental bankruptcy, all by degrees. It's a game of Economic Jenga really, as one slat after another is removed from the bottom of the original foundation. Roosevelt to Citizens in '33, Nixon to other governments in '71, and on to whatever form it eventually takes, when finally it all collapses, and at a sudden pace that is much faster than most can possibly imagine.

    Their small town eyes will gape at you in dull surprise when payment due exceeds accounts received at seventeen.
    - Janis Ian, At Seventeen
    Last edited by Steven Douglas; 01-04-2013 at 02:23 PM.

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    Needs a bigger boat Anti Federalist's Avatar
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    Only three ways out of this mess:

    1 - Inflate

    2 - Repudiate

    3 - War

  30. #29
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    Quote Originally Posted by Anti Federalist View Post
    Only three ways out of this mess:

    1 - Inflate

    2 - Repudiate

    3 - War
    Two down, one to come ...
    tu ne cede malis, sed contra audentior ito · fiat justitia, ruat caelum · sic semper tyrannis
    The Bastiat Collection - FREE PDF

    Frédéric Bastiat
    • "When law and morality are in contradiction to each other, the citizen finds himself in the cruel alternative of either losing his moral sense, or of losing his respect for the law."
      - The Law (p. 54)
    • "Government is that great fiction, through which everybody endeavors to live at the expense of everybody else."
      - Government (p. 99)
    • "[W]ar is always begun in the interest of the few, and at the expense of the many."
      - Economic Sophisms - Second Series (p. 312)
    • "There are two principles that can never be reconciled - Liberty and Constraint."
      - Harmonies of Political Economy - Book One (p. 447)

  31. #30

    Default liberal econ trillion dollar coin

    A society that places equality before freedom with get neither; A society that places freedom before equality will yield high degrees of both

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