So this has come up again, last time America approached a debt "ceiling' it was mentioned. Now it has been mentioned again. Sounds crazy but it might just work... http://oilprice.com/Finance/investi...May-Mint-a-Trillion-Dollar-Platinum-Coin.html
Let's see ... A trillion dollars is $1,000,000,000,000. (US) spot price is about $1610/oz. So that's (((1,000,000,000,000 / 1610) / 32.15 ) / 1000) == 19319 tonnes of platinum, give or take. That's one mighty big coin (or two) (please check my maths!)
also considering that they only mine 17 million oz a year worldwide or 528.77 tonnes they would require 36.5 years of the global supply. Pretty much impossible but interesting in theory.
my figures might be off on the mining side but either way were talking decades worth of global mining production which is nearly impossible to secure. actually not nearly impossible more like totally.
Well, they're not talking about producing a coin with a face value equal to the spot value of the metal - that would defeat the purpose of the exercise. They could produce a 1oz coin, or any size they wanted and stamp $1 trillion into it making it "worth" that amount of money. Basically all it does is sidestep the federal reserve and let the US govt. print their money directly without having to even pretend to borrow it from anybody.
Doesnt their constitution allow them to print their own money anyways? Why muck around and mint a coin when you can print some bills? If America really wanted to reduce its debt its simple, reduce your ridiculous military budget, and tax the super rich to the the tune of fiscally resppnsible countries, and live/spend within their means. You cant have your cake and eat it too.
Nah, the federal reserve has the power to print money. However the US mint is owned by the government and can mint coins for a profit. They're just talking about making a REALLY big profit on these ones. You think reducing spending is easier than just printing a few more trillion dollars? Woah - those votes don't buy themselves you know!
Bretton Woods 3: The Platinum Standard (sounds like the name of a brothel) Solves all our problems except it needs 576 years worth of platinum production to pay off the debt.
Except that they could just as easily produce a single 1oz coin with a face value of $17 trillion, deposit it in the federal reserve and pay off all the debt with that single ounce. No need for 500+ years of platinum production. Heck, the coin could probably be made of copper. The intrinsic value has no relevance.
I think they went with platinum because there are rules governing what coins can be made out of gold and silver and I don't think they could slip a new denomination in. Platinum on the other hand they can do what they want with. I am not sure about copper, they might be able to mint one of those but with the price of copper now-a-days I am not sure they could afford it
I know, I just thought as I was reading the thread up to my contribution: "The Platinum Standard (sounds like the name of a brothel)" and had to get it out there.
Because Treasury doesn't have the authority to issue notes - only the Fed does. They can however mint coins - the loophole here is that with platinum coins, they can determine the face value - no-one bothered to specify "platinum coins with face values not exceeding $100" etc type wording in the bill that authorises Treasury to mint platinum coins.
So just a recap... In the USA, only the Federal Reserve has the right to print notes, not the Government. Althought the Federal Reserve has the word "federal" in its name it is not a branch of the Government, it is a private business which prints banknotes and sells them to the Government. Only the Government has the right to mint coins. The Government has strict rules on what denominations it can produce in Gold and Silver. No one thought to put these same rules on platinum coins so the Government can put any face value it wants on a platinum coin. If the Government wants to put "$1 trillion" onto a 1/10th oz platinum coin it can, the intrinsic value of the coin does not have to match the face value, just the same as our own gold and silver coins. I wonder how many times it will be put up for consideration before they go ahead. The first articles I read on this were all quite mocking and included other 'crazy' ways to reduce the debt but more recent articles focus just on this one and how the fix would work. I guess when people stop laughing at these articles they will start demanding that the Gov mints the coin to save America from its debt problem.
Is "the Age" a bit like the "Weekly World News" that you can buy in supermarket checkouts? http://weeklyworldnews.com/ Just under the story of a trillion dollar coin is a story about a giant glow in the dark squid and they have pictures of a possible flower on the surface of Mars. I was also expecting to see pictures of a London Double Decker bus on the Moon or batboy. I miss the Weekly World News...
